Two Stage Efficiency Analysis of Indian Public and Private Sector Banks in the Context of OBS


Affiliations

  • Myanmar Institute of Information Technology (MIIT), Department of Commerce, Myanmar
  • Myanmar Institute of Information Technology (MIIT), Department of Math and Computer Science, Myanmar

Abstract

Efficiency is the only criteria to grow and sustain in the competitive markets. Due to technological innovations and emerging global market paradigm, any business organization is compelled to perform better than the yester-years. Banking sectors is one of the major players in the national economy and hence identifying the efficient ones and reducing the inefficient ones is a important task. Profitability is concerned, one look at the balance sheets and decide the rate of growth or decline in growth. In the banking context, one has to look in to the Off-Balance Sheet (OBS) items to study the growth pattern, rather than just depending on the balance Sheets alone. In general the OBS items appear as foot notes. Generally the efficiencies of financial institutions are decided based the standard approaches such as Ratio Analysis, a certain extend Regression Analysis.

A large number of studies based on OBS in the context of US banking sector and European Banking sectors have been done. A few research articles only available in Indian banking scenario in the context of OBS. This paper aims to bridge this gap. Last ten years good number of articles appeared based on Data Envelopment Analysis to study the efficiencies of various industrial sectors. In this paper, we have deployed the two-stage DEA to study the efficiencies of the public and private sector banks in the context of OBS.


Keywords

Data Envelopment Analysis (DEA), Frontier, Effectiveness, Off-Balance Sheet (OBS)

Subject Discipline

Financial Management

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