Banking sector productivity and growth of Indian financial system in e-banking period

Productivity in banking means the ability to become more beneficial for the economy and for the customers and to create more opportunities to earn profits for the growth and development. Banking sector productivity in India was influenced by many changes like the nationalization of banks, banking sector reforms, introduction of e-banking channels etc. In order to comparatively analyse bank's productivity in pre and post e-banking era, five bank groups namely Nationalized Banks, SBI & its associates, Old Private Sector Banks, New Private Sector Banks and Foreign Banks are selected and their productivity performance on deposit per branch, credit per branch, business per branch, total expenditure per branch, total earnings per branch, establishment expenditure per branch and spread per branch is evaluated in pre and post e-banking period. Pre e-banking period is taken as 1998 to 2001 and post e-banking period is taken as 2001 to 2012. Performance is evaluated with the help of average, coefficient of variation, range, skewness and Kurtosis. The results reveal that except G-I all the selected bank groups shows good sign of productivity as there is a significant increase in their spread per branch in post e-banking period as compared to pre e-banking period, but Foreign sector bank group is the most productive bank group among all the other bank groups as it shows maximum spread per branch in post e-banking period which determines its supremacy in the Indian banking industry.