Determinants of Productivity and Profitability of Indian Banking Sector: A Comparative Study

The purpose of this paper is to discuss the different determinants of productivity and profitability of banks functioning in India. The performance of public and private sector banks in terms of productivity and profitability is being assessed in two different time periods (2003-04 to 2008-09 and...

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Main Authors: Karam Pal NARWAL, Shweta PATHNEJA
Format: Article
Language:English
Published: Ala-Too International University 2015-11-01
Series:Eurasian Journal of Business and Economics
Subjects:
Online Access:http://www.ejbe.org/EJBE2015Vol08No16p035NARWAL-PATHNEJA.pdf
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spelling doaj-a22e1a1a00d34c1886b41b72948fb7072020-11-25T02:23:49ZengAla-Too International UniversityEurasian Journal of Business and Economics 1694-59481694-59722015-11-01816355810.17015/ejbe.2015.016.03Determinants of Productivity and Profitability of Indian Banking Sector: A Comparative StudyKaram Pal NARWAL0Shweta PATHNEJA1Guru Jambheshwar University of Science and TechnologyNational Institute of Technology (NITThe purpose of this paper is to discuss the different determinants of productivity and profitability of banks functioning in India. The performance of public and private sector banks in terms of productivity and profitability is being assessed in two different time periods (2003-04 to 2008-09 and 2009-10 to 2013-2014). The linear programming model Data Envelopment Analysis (DEA) based Malmquist index is used to measure total factor productivity of groups and sub-group banks. The decomposition of total factor productivity into pure technical and scale efficiency is done to get a comprehensive insight of the effect of these two on the overall productivity. Further, regression analysis discovers the determinants of different bank groups. The results of the study disclose that private sector banks are more productive than public sector banks over the whole study period. But no significant difference exists in the profitability of two bank groups. The main reason of more productivity of private sector banks is the better utilization of technology than the public sector banks. Further, the productivity of banking sector of India is not found significantly different in the two sub-periods although the banks have performed better in the sub-period II (2009-10 to 2013-14).http://www.ejbe.org/EJBE2015Vol08No16p035NARWAL-PATHNEJA.pdfProductivityPerformanceProfitabilityBanksOwnershipIndia.
collection DOAJ
language English
format Article
sources DOAJ
author Karam Pal NARWAL
Shweta PATHNEJA
spellingShingle Karam Pal NARWAL
Shweta PATHNEJA
Determinants of Productivity and Profitability of Indian Banking Sector: A Comparative Study
Eurasian Journal of Business and Economics
Productivity
Performance
Profitability
Banks
Ownership
India.
author_facet Karam Pal NARWAL
Shweta PATHNEJA
author_sort Karam Pal NARWAL
title Determinants of Productivity and Profitability of Indian Banking Sector: A Comparative Study
title_short Determinants of Productivity and Profitability of Indian Banking Sector: A Comparative Study
title_full Determinants of Productivity and Profitability of Indian Banking Sector: A Comparative Study
title_fullStr Determinants of Productivity and Profitability of Indian Banking Sector: A Comparative Study
title_full_unstemmed Determinants of Productivity and Profitability of Indian Banking Sector: A Comparative Study
title_sort determinants of productivity and profitability of indian banking sector: a comparative study
publisher Ala-Too International University
series Eurasian Journal of Business and Economics
issn 1694-5948
1694-5972
publishDate 2015-11-01
description The purpose of this paper is to discuss the different determinants of productivity and profitability of banks functioning in India. The performance of public and private sector banks in terms of productivity and profitability is being assessed in two different time periods (2003-04 to 2008-09 and 2009-10 to 2013-2014). The linear programming model Data Envelopment Analysis (DEA) based Malmquist index is used to measure total factor productivity of groups and sub-group banks. The decomposition of total factor productivity into pure technical and scale efficiency is done to get a comprehensive insight of the effect of these two on the overall productivity. Further, regression analysis discovers the determinants of different bank groups. The results of the study disclose that private sector banks are more productive than public sector banks over the whole study period. But no significant difference exists in the profitability of two bank groups. The main reason of more productivity of private sector banks is the better utilization of technology than the public sector banks. Further, the productivity of banking sector of India is not found significantly different in the two sub-periods although the banks have performed better in the sub-period II (2009-10 to 2013-14).
topic Productivity
Performance
Profitability
Banks
Ownership
India.
url http://www.ejbe.org/EJBE2015Vol08No16p035NARWAL-PATHNEJA.pdf
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