1College of Management, Georgia Tech, 800 West Peachtree Street, Atlanta, GA 30332, USA. Tel: +1-404-894-5109; Fax: +1 404-894-6030; e-mail: rajesh.chakrabarti@mgt.gatech.edu
2College of Management, Georgia Tech, 800 West Peachtree Street, Atlanta, GA 30332, USA. Tel: +1 404-385-0059; e-mail: Gaurav.Chawla@mba.gatech.edu
We apply the increasingly popular methodology of Data Envelopment Analysis to evaluate the relative efficiency of Indian banks during the 1990–2002 period. Our results suggest that on a “value” basis, the foreign banks, as a group, have been considerably more efficient than all other bank groups, followed by the Indian private banks. From a “quantity” perspective however, the Indian private banks seem to be doing the best while the foreign banks are the worst performers. This seems to reflect the general policy of foreign banks to “cherry-pick” more profitable businesses rather than offer banking services to a wider section. The public sector banks have, in comparison, lagged behind their private counterparts in performance.
