Efficiency and productivity change of Indian commercial banks- A non-parametric approach

This paper investigates the productivity and efficiency growth of Banking industry in India during the period 1999–2009. The data consists of a panel of 19 nationalised banks and 17 private sector banks. Data envelopment Analysis has been used to estimate the different performance measures. Malmquist productivity measures are decomposed into two components: efficiency change and technical change. Efficiency change is further decomposed into pure efficiency and scale efficiency. Results indicate that during the study period, banking industry experienced regress in technological progress along with decline in technical efficiency. From the group wise analysis nationalized banks have performed better in CRS and VRS efficiencies and total factor productivity growth. Whereas private sector banks have not experienced positive productivity growth during the study period.