A comparative analysis on the business performance of private and public sector banks in India

The banking sector has undergone a complex but comprehensive structural change since 1991. The main intention of the banking sector reforms was to encourage a diversified, efficient and competitive financial system with the ultimate objective of improving the allocative efficiency of resources through operational flexibility, improved financial viability and institutional strengthening. Two decades passed since then, hence it is important to analyse and compare the performance of private and public sector banks functioning in India. For these purpose variables like Deposits, Advances, Investments, Interest Income, Interest Expenses, Number of banks, Number of Employees, Business per Employee and Profit per Employee are considered for a period of five years from 2007–08 to 2011–12. Descriptive statistics and correlation is used to measure the movement of variables and to analyse the relationship among the variables. The analysis shows that deposits, advances and investments are more in Public Sector Banks than in Private Sector Banks. However, Business per Employee and Profit per employee is more in Private Sector Banks than in Public Sector Banks.