Efficiency Assessment of Indian Commercial Banks: A Meta-Frontier Approach

Khan, T.L., Bandopadhyay, K. (2020). Efficiency Assessment of Indian Commercial Banks: A Meta-Frontier Approach, Indian Journal of Commerce, 73(1&2), 141-157

17 Pages Posted: 8 Sep 2020

See all articles by Tagar Lal Khan

Tagar Lal Khan

Vidyasagar University - Department of Commerce with Farm Management

Kalpataru Bandopadhyay

Vidyasagar University

Date Written: 2020

Abstract

The study examines the efficiency of the Indian Commercial Banks in the backdrop of undesirable Non-Performing Assets. The study applies Meta-Frontier approach for assessing the efficiency of banks in heterogeneous Indian banking groups, such as Indian PSU Banks, Domestic Private Banks and Foreign Banks, from managerial point of view. The study reveals that, the issue of Non-Performing Assets which is considered as alarming in case of the Indian banking sector, has not been efficiently and properly addressed by the Indian PSU banks and Domestic Private Banks. None of the Indian PSU banks is able to position as an efficient frontier in the Meta frontier matrix. Wilcoxon matched pairs signed ranks test confirms that only the Indian foreign banks are serious in managing their NPAs effectively. Mann- Whitney independent sample test also confirms that there is a significant difference in Meta efficiency scores and technological gap inefficiency scores of Foreign Banks compared to the PSU and Indian Domestic Private Banks. The Indian foreign banks outperform PSU and Domestic private banks in all respects, which may be owing to their advanced technology, global focus and global experience in banking operations.

Keywords: NPA, Non-Performing Asset, Bank, Meta-frontier Approach

JEL Classification: G21, G28

Suggested Citation

Khan, Tagar Lal and Bandopadhyay, Kalpataru, Efficiency Assessment of Indian Commercial Banks: A Meta-Frontier Approach (2020). Khan, T.L., Bandopadhyay, K. (2020). Efficiency Assessment of Indian Commercial Banks: A Meta-Frontier Approach, Indian Journal of Commerce, 73(1&2), 141-157, Available at SSRN: https://ssrn.com/abstract=3662459

Tagar Lal Khan

Vidyasagar University - Department of Commerce with Farm Management ( email )

Vidyasagar University
Midnapur, West Bengal 713101
India

Kalpataru Bandopadhyay (Contact Author)

Vidyasagar University ( email )

Department of Commerce, Vidyasagar University, Wes
Midnapur, West Bengal 721102
India
9434665183 (Phone)

HOME PAGE: http://vidyasagar.ac.in/Faculty/Profile?fac_u_id=Fac-COM-59

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