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Bank
Size and Corporate Governance
Structure
--Srinivas
Nippani, Ram S Vinjamury and Chenchuramaiah Bathala
This
paper examines the importance of corporate governance structures
for the banking industry. It finds that there exist significant
differences between the governance structures of banks based
on their size and that banks' stock market returns are significantly
influenced by board composition. It also finds that other
governance mechanisms such as audit committee structure, takeover
defense and executive compensation have no bearing on the
returns to the banks' stockholders. The results also show
that banks of different sizes have differing corporate governance
characteristics.
©
2008 IUP . All Rights Reserved.
The
Impact of Size and Group Affiliation on Technical Efficiency
of Indian Public Sector Banks: An Empirical Investigation
--Sunil
Kumar and Rachita Gulati
The
paper aims to analyze the effect of size and group affiliation
on the Technical Efficiency (TE) of Indian Public Sector Banks
(PSBs) within a cross-sectional perspective. Since the correct
functional form of the production function of the bank is
not known, the technique of Data Envelopment Analysis (DEA)
has been utilized for computing the TE scores of individual
PSBs. The empirical results suggest that the extent of TE
in the Indian public sector banking industry is to the tune
of 88.5%. Further, the observed level of technical inefficiency
is primarily due to managerial underperformance in organizing
inputs (i.e., pure technical inefficiency) rather than divergence
of actual scale of operations from the most productive scale
size (i.e., scale inefficiency). Regarding group affiliation,
the results revealed that the banks affiliated to State Bank
of India group are more efficient than the nationalized banks.
The relationship between size and technical efficiency indicates
that the small banks are more efficient than their large counterparts.
In addition, the results of regression analysis highlight
that the hypothesis `the larger the bank in terms of total
assets, higher is the level of its efficiency' does not hold
good in Indian public sector banking industry.
©
2008 IUP . All Rights Reserved.
Fee-Based
Activities and Technical Efficiency: An Assurance Region Model
of Indian Commercial Banks
--Ram
Pratap Sinha and Biswajit Chatterjee
The
paper compares 38 Indian commercial banks in terms of their
fee-based activities and off balance sheet exposures using
the assurance region model (a non-radial approach to data
envelopment analysis). This approach avoids the problem of
slacks by imposing restrictions on the shadow prices of inputs
and/or outputs. The results available from the application
of the assurance region model in the context of the Indian
commercial banks (for measuring their technical efficiency
in respect of fee-based activities) suggest a secular improvement
in technical efficiency over the observed years. However,
there are significant differences in mean technical efficiency
across ownership categories (public and private sector commercial
banks). Finally, there has been a significant shift in the
returns to scale characteristics of the observed commercial
banks during the period under observation.
©
2008 IUP . All Rights Reserved.
Customer
Expectations and Service Level in E-Banking Era: An Empirical
Study
--N
Kamakodi and M Basheer Ahmed Khan
It
is almost 15 years since the Indian banking sector was liberalized
and paradigm shift happened in the Indian banking services.
All banks have either totally implemented `core banking systems'
or halfway through. The results of a survey were obtained
from 292 respondents about their views on electronic banking
channels, indicate that the banks are exceeding the expectations
in technology based services; and their perceived service
level on branch network is below the expected levels of the
respondents. This result is in tune with the respondents'
opinion on the perceived `gap' with the bank because of the
introduction of technology, and on the necessity of human
contact with the clients by the banks. This throws up a challenge
to banks. Technology alone cannot give a sustainable competitive
advantage for the banks. When all banks introduce IT, it will
lose its position as a differentiator. Beyond a point, IT
along with `personal touch' will be necessary for the banks
to retain existing clients and to attract new ones. Banks
have to incorporate this in their operational strategy.
©2008
IUP . All Rights Reserved.
Spread
of E-Banking in Malaysia: A Consumer Perspective
--Wai-Ching
Poon and Booi-Chen Tan
This
paper examines the factors affecting the growth of e-banking
in Malaysia from the consumers' perspective. A Likert scale
questionnaire survey is applied. The results show that there
are seven factors influencing the growth of e-banking—convenience
of usage (including Internet accessibility and ease of use),
cost of services, trust in bank (bank's credibility), security
concerns, awareness, reluctance of customers and government
supports. The results indicate that all the factors are significant
with respect to the consumers' willingness in using e-banking
services. The limitations of this study are discussed and
suggestions for future research are also put forward.
©
2008 IUP . All Rights Reserved.
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November '08
