Performance of Private Banks in India after the Global Financial Crisis

Abstract

The present study attempts to evaluate the growth and performance of 21 private banks of the Indian banking system using indicators like credit, deposit, return on assets etc. The study also evaluates the overall technical efficiency, pure technical efficiency, scale efficiency, allocative efficiency and cost efficiency between 2009-10 to 2018-19 using non-parametric data envelopment analysis (DEA). The inputs and outputs have been specified using intermediation approach. The inputs used are sum of deposits and borrowings, number of employees and fixed assets. Investments, advances and other income are taken as outputs. Prices of inputs have also been used to evaluate allocative and cost efficiency. The findings of the study indicate that new private banks had better average overall technical efficiency, average pure technical efficiency, average scale efficiency and average cost efficiency. IDFC bank was the only bank efficient in all the types of efficiencies. Further, the negative effect of non-performing assets was also seen on the performance and efficiency of new and old private banks.