Banking service production index measurement challenges for banking sector in India

Part of the banking services output can be directly measured and part indirectly, the latter due to implicitness of such output. It is observed that selection of an appropriate reference rate, suitable deflator besides availability of data pose serious challenges to construct an effective index for services production for banking sector in India. Based on balance sheet data of seBs (including RRBs) forty sets of BSP! (fixed base and chain linked) with 2004–05 as base year have been constructed based on different reference rates and deflators. To start with, BSPI may be constructed using YTM of GoI as reference rate and deflator based on banking service price index.