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Radial Data Envelopment Analysis Approach to Performance Measurement: Study on Indian Banking System

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Supply Chain Intelligence

Part of the book series: Management and Industrial Engineering ((MINEN))

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Abstract

Altering customer demands with augmented competitive pressures significantly change the operating environment of Indian banks. Being competitive, banks are continuously keeping themselves on a platform of performance as set by them. Traditional methods for evaluation of performance are not working properly due to different issues as floated in this sector. Considering all the above issues, performance measurement is very complex as well as critical in terms of banks long-term sustainability. This study adopts a non-traditional method of measuring performance via Data Envelopment Analysis; a frontier-based radial approach to measure performance between public and private sector banks for last five years (2015–2019). Using non-parametric test, this study also tests the hypothesis that ‘there exist no statistical efficiency differences between the public and private sector banks’. Analyses show a significant result that: no bank is found to be overall technically efficient with all banks scoring less than one, and the private sector banks is 1.5% more technically efficient than public sector banks. Most significantly, strong ownership effect is proofed to be significant on the performance of Indian banking system.

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Author information

Authors and Affiliations

  1. Department of Management, Birla Institute of Technology, Mesra, Ranchi, India

    Preeti & Supriyo Roy

  2. Department of Mechanical Engineering, Birla Institute of Technology, Mesra, Ranchi, India

    Kaushik Kumar

Authors
  1. Preeti
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  2. Supriyo Roy
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  3. Kaushik Kumar
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Corresponding author

Correspondence to Preeti .

Editor information

Editors and Affiliations

  1. Department of Mechanical Engineering, Birla Institute of Technology, Mesra, Ranchi, Jharkhand, India

    Kaushik Kumar

  2. Department of Mechanical Engineering, University of Aveiro, Aveiro, Portugal

    J. Paulo Davim

Appendix

Appendix

No.

Full name

Code

No.

Full name

Code

No.

Full name

Code

1

Allahabad Bank

ABB

18

Dhanlaxmi Bank Limited

DBL

35

Punjab National Bank

PNB

2

Andhra Bank

AB

19

Federal Bank Limited

FB

36

Pure Technical Efficiency

PTE

3

Axis Bank Limited

ABL

20

HDFC Bank Limited

HDFC

37

Public sector bank

PSB

4

Bank of Baroda

BoB

21

ICICI Bank Limited

ICICI

38

Private sector bank

PB

5

Bank of India

BoI

22

IDBI Bank Limited

IDBI

39

RBL Bank Limited

RBL

6

Bank of Maharashtra

BoM

23

Indian Bank

IB

40

Return to scale

RTS

7

Banker, Cooper and Rhodes

BCC

24

Indian Overseas Bank

IOB

41

Scale efficiency

SE

8

Canara Bank

CB

25

Indusind Bank Limited

IBL

42

South Indian Bank Limited

SIB

9

Catholic Syrian Bank Ltd.

CSB

26

Jammu & Kashmir Bank Ltd.

JKB

43

State Bank of India

SBI

10

Central Bank of India

CBI

27

Karnataka Bank Limited

KB

44

Syndicate Bank

SB

11

Charnes, Cooper and Rhodes

CCR

28

Karur Vysya Bank Ltd.

KVB

45

Tamilnad Mercantile Bank Ltd.

TMB

12

City Union Bank Ltd.

CUB

29

Kotak Mahindra Bank Limited

KMB

46

UCO Bank

UCO

13

Corporation Bank

CPB

30

Lakshmi Vilas Bank Ltd.

LVB

47

Union Bank of India

UB

14

Data Envelopment Analysis

DEA

31

Nainital Bank Limited

NB

48

United Bank of India

UBI

15

DCB Bank Limited

DCB

32

Oriental Bank of Commerce

OBC

49

Variable return to scale

VRS

16

Decision Making Unit

DMU

33

Overall Technical Efficiency

OTE

50

Vijaya Bank

VB

17

Dena Bank

DB

34

Punjab & Sind Bank

PS

51

YES Bank Limited

YES

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Preeti, Roy, S., Kumar, K. (2020). Radial Data Envelopment Analysis Approach to Performance Measurement: Study on Indian Banking System. In: Kumar, K., Davim, J. (eds) Supply Chain Intelligence. Management and Industrial Engineering. Springer, Cham. https://doi.org/10.1007/978-3-030-46425-7_8

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  • DOI: https://doi.org/10.1007/978-3-030-46425-7_8

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-46424-0

  • Online ISBN: 978-3-030-46425-7

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