Productivity growth of Indian banking sector: A comparative analysis of pre‐ and post‐global financial crisis

Abstract

This article evaluates the productivity growth of Indian banks during the pre-and post-global financial crisis of 2008. Productivity is calculated across banking groups, such as public, private, and foreign peers, using Malmquist Productivity Index through data envelopment analysis. Empirical findings indicate that the efficiency and productivity growth of Indian banks have declined in the post-global financial crisis as compared with the pre-financial crisis. We observe efficiency differences across ownership groups; further results clarify that the total factor productivity growth of public banks is lower than that of private and foreign players, mostly due to the change in technical progress though not driven by technical efficiency. The study suggests that having a base in technological advances might help perform better when encountering a crisis.

Methodological approach to the assessment of the national banking sector transformation under the influence of fintech

“…Based on companies' fundamental indicators (balance sheet and profit and loss statement items). The most widespread method is the analysis of the factor productivity based on the Malmquist index (Zhao, Pi, Zhang, 2022;Cao, Cook, Kristal, 2022;Kale, 2022;Paulet, Mavoori, 2020;Luo et al, 2022;Lee et al, 2021). However, some researchers opt for the econometric analysis of basic quantitative industry performance characteristics, such as ROE, ROA, assets turnover, etc.…”