Financial liberalisation and bank efficiency: A note on trends in profitability of Indian Public Sector Banks

As a result of globalization of financial markets these banking institutions face today a fast paced, dynamic and a competitive environment at the global scale. Within such a competitive environment, financial institutions are forced to examine their performance because their survival in the dynamic economics of Twenty-first century will be dependent upon their productive efficiencies. It is, therefore, relevant to study the efficiency with reference to the profitability of Public Sector Banks in general and State Bank of India and its Associates in particular in the post reform era of banking sector. From the analysis, it is concluded that there was a continuous upward trend in total income of SBI and its associate banks during the study period. Further, comparative analysis proved that all the associate banks except state bank of Saurashtra have the highest growth in burden compared to SBI. The analysis of trends of profit confirmed that the trends of profit fluctuated in all the cases except State Bank of Travancore which registered an increasing trend of profit during the study period. To conclude, SBI and its associates have marched ahead during the post-second banking sector reforms period in fostering economic growth of the country and has shown tremendous resilience and vibrancy in their strategies, processes and operations to remain competitive in the globalized environment.