Assessment of Technical Efficiency of Public Sector Banks in India Using Data Envelopment Analysis

Authors

  • Aparna BHATIA Guru Nanak Dev University
  • Megha MAHENDRU Guru Nanak Dev University

Keywords:

Technical Efficiency, Public Sector Banks (PSBs), India, Data Envelopment Analysis (DEA), Panel Data Tobit Regression

Abstract

The main aim of the paper is to analyze technical efficiency of Public Sector Banks (PSBs) in India during the period 1990-91 to 2011-12. The paper also examines whether there is statistically significant difference in efficiency of PSBs in the reformatory era (1990-91 to 2000-01) as compared to the post reformatory era (2001-02 to 2011-12). Using CAMEL framework, the paper also investigates the determinants of efficiency of PSBs. The results show that PSBs exhibit higher mean of the efficiency parameters in post reformatory era (2001-02 to 2011-12) than in the reformatory era (1990-91 to 2000-01). PSBs inefficiency is attributed to Pure Technical Inefficiency in reformatory era whereas the same is accredited to scale inefficiency in the post reformatory era. Paired t test shows that there is significant difference in performance of Public Sector Banks in reformatory era and post reformatory in all the Efficiency parameters. The results of Panel Data TOBIT regression suggest that various CAMEL parameters have significant impact on the technical efficiency of PSBs.

Published

31-05-2015

How to Cite

BHATIA, A., & MAHENDRU, M. (2015). Assessment of Technical Efficiency of Public Sector Banks in India Using Data Envelopment Analysis. Eurasian Journal of Business and Economics, 8(15), 115-140. Retrieved from https://ejbe.org/index.php/EJBE/article/view/145

Issue

Section

Articles