Efficiency
and Profitability in Indian Public
Sector Banks
--Ruchi Trehan and
Niti Soni
Significance
of appraising the efficiency of banking industry has become
more of a necessity than a luxury in the modern world of financial
services as it makes it possible to separate those banks that
performed well from those that performed poorly. The present
study attempts to analyze the operating efficiency and its
relationship with profitability, in the public sector banking
industry in India. The analysis of the relationship between
the group status and technical efficiency shows that 1) the
banks affiliated to the SBI group are more efficient than
nationalized banks and 2) the difference in the efficiency
levels of these two groups is statistically significant. Significance
of appraising the efficiency of banking industry has become
more of a necessity than a luxury in the modern world of financial
services as it makes it possible to separate those banks that
performed well from those that performed poorly. The present
study attempts to analyze the operating efficiency and its
relationship with profitability, in the public sector banking
industry in India. The analysis of the relationship between
the group status and technical efficiency shows that 1) the
banks affiliated to the SBI group are more efficient than
nationalized banks and 2) the difference in the efficiency
levels of these two groups is statistically significant.
Issues
of Political Economy in Banking Regulation: A Survey
--
Srivyal Vuyyuri and Ganesh S Mani
This
article reviews the literature on political economy of banking
regulation. The organization of this paper is based on the
two main traditions about regulation, namely the normative
or prudential and the positive political economy traditions.
Several theoretical elements are extracted from the review
of the specialized literature on regulation. The main aspects
covered here are the rationale and instruments for banking
regulation; the failure of governments in various settings;
endogenous regulation and the political economy of banking
regulation. The paper also covers a new dimension of banking
regulation - as a dialectic process.
Automated Teller Machines (ATMs): The Changing Face of Banking in India
Bank Management
Information and communication technology has changed the way in which banks provide services to its customers. These days the customers are able to perform their routine banking transactions without even entering the bank premises. ATM is one such development in recent years, which provides remote banking services all over the world, including India. This paper analyzes the development of this self-service banking in India based on the secondary data.
The Information and Communication Technology (ICT) is playing a very important role in the progress and advancement in almost all walks of life. The deregulated environment has provided an opportunity to restructure the means and methods of delivery of services in many areas, including the banking sector. The ICT has been a focused issue in the past two decades in Indian banking. In fact, ICTs are enabling the banks to change the way in which they are functioning. Improved customer service has become very important for the very survival and growth of banking sector in the reforms era. The technological advancements, deregulations, and intense competition due to the entry of private sector and foreign banks have altered the face of banking from one of mere intermediation to one of provider of quick, efficient and customer-friendly services. With the introduction and adoption of ICT in the banking sector, the customers are fast moving away from the traditional branch banking system to the convenient and comfort of virtual banking. The most important virtual banking services are phone banking, mobile banking, Internet banking and ATM banking. These electronic channels have enhanced the delivery of banking services accurately and efficiently to the customers. The ATMs are an important part of a bank’s alternative channel to reach the customers, to showcase products and services and to create brand awareness. This is reflected in the increase in the number of ATMs all over the world. ATM is one of the most widely used remote banking services all over the world, including India. This paper analyzes the growth of ATMs of different bank groups in India.
International Scenario
If ATMs are largely available over geographically dispersed areas, the benefit from using an ATM will increase as customers will be able to access their bank accounts from any geographic location. This would imply that the value of an ATM network increases with the number of available ATM locations, and the value of a bank network to a customer will be determined in part by the final network size of the banking system. The statistical information on the growth of branches and ATM network in select countries.
Indian Scenario
The financial services industry in India has witnessed a phenomenal growth, diversification and specialization since the initiation of financial sector reforms in 1991. Greater customer orientation is the only way to retain customer loyalty and withstand competition in the liberalized world. In a market-driven strategy of development, customer preference is of paramount importance in any economy. Gone are the days when customers used to come to the doorsteps of banks. Now the banks are required to chase the customers; only those banks which are customercentric and extremely focused on the needs of their clients can succeed in their business today.