Asian Journal of Managerial Science (AJMS)
An Assessment of Profitability and Efficiency of Commercial Banks in IndiaAuthor : Shradha H. Budhedeo
Volume 7 No.2 July-September 2018 pp 47-53
Efficiency and stability of the banking sector is a pre-requisite to economic growth of the nation. The banking industry has undergone phenomenal transformation over the past six decades since independence. Banks have shifted from traditional methods of banking to newer modern systems. This has led to impressive growth of commercial banks in India. In the year 2007, financial crisis loomed over the global economy with severe adverse effects on many western economies. In comparison, India stood poised as the fastest growing emerging market economy in the face of turmoil and pessimism. Although India stood strong, many banks started witnessing a change in their growth path during the post global financial crisis period. The public sector banks witnessed major setbacks with decline in their financial performance. In this light, the objective of the study is defined; so as to determine the role of efficiency and profitability indicators on the performance of bank groups. The findings of the study reveal that foreign banks have shown outstanding profitability performance and excellent management efficiency. It is the private sector banks that have outperformed the competing bank groups in terms of earning efficiency. Public sector banks have lagged behind with deteriorating profitability and efficiencies during the analysis period.
Profitability, Management, Earning, Efficiency, Commercial Banks, Ratio Analysis, Performance, Public Sector Banks, Private Sector Banks, Foreign Banks, Bank Groups, India
 Batra, A. (1996). Bank Profitability with a Hybrid Profit Function: The Indian Case. Indian Economic Review, 31(2), 223-234.
 Li, S., Liu, F., Liu, S., & Whitmore, G. A. (2001, January). Comparative Performance of Chinese Commercial Banks: Analysis, Findings and Policy Implications, Review of Quantitative Finance and Accounting, 16(2), 149-170.
 Mohan, T. T., & Ray, C. S. (2004). Comparing Performance of Public and Private Sector Banks: A Revenue Maximisation Efficiency Approach, Economic and Political Weekly, 39(12), 20-26.
 Sree Rama Murthy, Y. (2004). Financial Ratios of Major Commercial Banks, June. Retrieved from SSRN: https://ssrn.com/abstract=10152
38 or http://dx.doi.org/10.2139/ssrn.1015238.
 Nimalathasan, B. (2008). A Comparative Study of Financial Performance of Banking Sector in Bangladesh – An Application of CAMELS Rating, Annals of University of Bucharest, Economic and Administrative Series, 2, 141-152, July. Retrieved from SSRN: https://ssrn.com/abstract=2117189
 Kumbirai, M., & Webb, R. (2010, December). A Financial Ratio Analysis of Commercial Bank Performance in South Africa, African Review of Economics and Finance, 2(1), 30-53.
 Boolaky, A., & Auhammud, K. (2011). An Evaluation of Commercial Banks Performance: The Mauritian Context, Conference Paper, International Conference on Contemporary Mauritius, January. Retrieved from https://www.researchgate.net/publication/281449335
 Koundal, V. (2012, September). Performance of Indian Banks in Indian Financial System, International Journal of Social Science & Interdisciplinary Research, 1(9), 204-213.
 Singh, A. B., & Tandon, P. (2012, November). A Study of Financial Performance: A Comparative Analysis of SBI and ICICI Bank, International Journal of Marketing, Financial Services & Management Research, 1(11), 56-71.
 Goel, C., & Rekhi, C. (2013). A Comparative Study on the Performance of Selected Public Sector and Private Sector Banks in India, Journal of Business Management and Social Science Research, 2(7), 46-56.
 Haque, A. (2014). Comparison of Financial Performance of Commercial Banks: A Case Study in the Context of India (2009-2013), Journal of Finance and Bank Management, 2(2), 1-14.
 Islam, M. A. (2014). An Analysis of the Financial Performance of National Bank Limited using Financial Ratio, Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport, 2 (5), 121-129.
 Malyadri, P., & Sirisha, S. (2015). An Analytical Study on Trends and Progress of Indian banking Industry, Journal of Business & Financial Affairs, 4(1). DOI: 10.4172/2167-0234.1000136.
 Mittal, R. (2017). The Problem of Rising Non-Performing Assets in Banking Sector in India: Comparative Analysis of Public and Private Sector Banks, International Journal of Management, IT & Engineering, 7(7), 384-389.
 Adwani, V. K. (2018, May). Employees Productivity in Indian Banking: A Comparative Study of Top Public and Private Sector Banks, International Journal of Current Research in Life Sciences, 7(5), 1965-1972.
 Sharma, R. P., & Sharma, A. (2018). A Comparative Appraisal of Financial Performance of Indian Public Sector Banks, International Journal of Economics & Finance Research & Applications, 2(1) 34-41.