Productivity Change in Nationalised Banks Operating in India: A Malmquist Productivity Index Approach
Keywords:
Malmquist productivity Index, Indian Nationalised Banks, Data Envelopment Analysis, Technological Change, Efficiency ChangeAbstract
The present study endeavours to examine the change in productivity of nationalised banks operating in India. The data were collected from the Statistical Tables Related to Banks in India published by the Reserve Bank of India for the period of 21 years starting from the year 1997-98 i.e. after second generation reforms till the year 2017-18. Using Data Envelopment Analysis (DEA) based Malmquist Productivity Index (MPI) approach, it was found that only six banks including the Indian Bank, the Vijaya Bank, the Andhra Bank, the Bank of Baroda, the Indian Overseas Bank and the Bank of India showed positive productivity change. Majority of the banks showed deterioration in productivity. It was concluded that the productivity change was negative due to inability of Indian nationalised banks to adopt technology. But, on the other hand, these banks were able to achieve high level of efficiency improvement. It is strongly recommended that Indian nationalised banks should invest more in technology in order to improve productivity growth.
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