Impact of Post-Deregulation Developments on the Performance of the Indian Banking Industry-A DEA-based Malmquist Total Factor Productivity Approach

Abstract

Over the past two decades, the Indian financial sector in general and the banking industry, in particular, have undergone significant changes, which influenced the stability and efficiency of the system. We measure the productivity changes in the Scheduled Commercial Banks (SCBs) and examine the impact of post-deregulation developments (1992–93 to 2009–10). We employed DEA-based Malmquist TFP index to address: i) Whether banks in India have ‘caught up or fallen behind regarding efficiency, since deregulation; and ii) Whether these banks have demonstrated technological progress or regress.