Sources of Productivity Gains in Indian Banking Industry: Is It Efficiency Improvement or Technological Progress?

  • Sunil Kumar
  • Rachita Gulati
Part of the India Studies in Business and Economics book series (ISBE)


The main focus of present chapter is to look at the impact of financial deregulation programme launched in the year 1992 on the productivity performance of Indian banks. The empirical results indicate that total factor productivity in Indian banking industry followed an uptrend during the post-deregulation period, albeit trend was modest. Further, the observed productivity growth was almost entirely attributable to technological progress. While the public sector banks made steadier progress in productivity, the de novo private banks outperformed their peers. The empirical findings also reflect the enormous relevance of foreign ownership in Indian banking industry since foreign banks have emerged as the leading technological innovators in the banking system. In addition, exposure to off-balance activities has been noted as the most significant factor in explaining the observed inter-bank variations in the total factor productivity growth.


Productivity Growth Total Factor Productivity Total Factor Productivity Growth Private Bank Foreign Bank 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer India 2014

Authors and Affiliations

  • Sunil Kumar
    • 1
  • Rachita Gulati
    • 2
  1. 1.Faculty of EconomicsSouth Asian UniversityNew DelhiIndia
  2. 2.Department of Humanities and Social SciencesIndian Institute of Technology RoorkeeRoorkeeIndia

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