The Performance of Indian Commercial Banks Based on Multiple Criteria of Efficiency

--Sanjeev C Panandikar

The multi-criteria method, TOPSIS, is used with weights obtained using entropy function of information theory, to measure the metric efficiency ratings for Indian commercial banks on a (0, 1) scale. The bank-wise data comprising seven financial ratios is used from financial year 2001-02 to 2012-13 to rate and rank the banks. The hypotheses of equal and stable performance are tested. The findings reveal that the public sector, private sector and foreign banks do not differ in terms of average efficiency ratings but they differ from year to year. The non-performing assets and the business per employee are found to carry the highest weights.

© 2014 IUP. All Rights Reserved.

A Multi-Criteria Decision Making Model-Based Approach for Evaluation of the Performance of Commercial Banks in India

--Tamal Datta Chaudhuri and Indranil Ghosh

This paper applies multi-criteria decision making algorithms to arrive at the financial health of commercial banks in India, both in the public sector and the private sector. The various performance parameters considered arise out of the Basel guidelines, and we feel that our study will facilitate the regulator in monitoring the performance of banks over time. We also investigate whether the stock market has taken cognizance of these regulatory variables and valued banks accordingly. Our results indicate that while relative performance of private sector banks has not undergone much change, some public sector banks have improved over time. The results also reveal that the stock market does not attach much importance to these regulatory variables in the valuation of banks.

© 2014 IUP. All Rights Reserved.

An Exploratory Study of Factors Influencing the e-Loyalty of Online Banking Consumers

--Sonika Raitani and Vishal Vyas

Banking and Information Technology (IT) can hardly be separated today. Banks are in the forefront of using cutting-edge technology. The fundamentals of banking have remained the same, but the perceived value from banking services has been changing due to the pace at which technology is changing in terms of the means and tools it provides us with. On the one side, it is helping banks in meeting customer service expectations, and on the other side, they are presented with the challenge posed by hackers and cyber criminals. This paper is an attempt to study what keeps the e-banking customer loyal in such a banking environment. Through exploratory research, the authors have synthesized various factors from literature that may influence the e-loyalty of banking customers. The data was collected through a validated questionnaire, administered to a convenient sample of 245 banking customers in Rajasthan. Exploratory factor analysis was performed to analyze the data. The results suggest that website quality, e-trust, e-satisfaction, corporate image, product information and perceived security significantly affect the e-loyalty of online banking customers. The originality of this paper lies in its exploratory nature, as most of the studies related to online banking have focused only on a few of these factors.

© 2014 IUP. All Rights Reserved.

Determinants of Remittances to Bangladesh: A Regression Analysis

--Bimal Sarkar and Kanchan Datta

In any developing country, shortage of foreign exchange reserve, which is very essential to pay the import bills, is a common problem. Bangladesh, which depends more on remittances to pay its import bills, is not an exception. Over the last decade, the workers’ remittances played a crucial role in the economic development of the country. This paper examines the determinants of remittances in the economy of Bangladesh. Using econometric techniques, this study finds that factors like GDP, crude petroleum price and exchange rate have a significant positive impact on the remittance inflow in Bangladesh.

© 2014 IUP. All Rights Reserved.

Evaluating the Credit Risk Management Framework of Public and Private Sector Banks in India: A Comparative Study

--Anju Arora and Muneesh Kumar

Professional management and sincere efforts towards upgrading Credit Risk Management (CRM) framework have gained reasonable pace in both the public and private sector banks alike. The present study, first of its kind, attempts to find the difference in the strength of overall CRM framework of private and public sector banks in India in quantitative terms and also identifies the specific CRM elements leading to such differences in their respective frameworks, if any. A mathematical evaluation tool, namely, CRM Index Score, comprising quantitative assessment of the current set of CRM practices relating to organization, policy and strategy, operations and systems at transaction level and operations and systems at portfolio level, the four basic elements of CRM framework, were deployed for making a comparative evaluation. The findings revealed that the strength of the overall CRM framework did not vary significantly between public and private sector banks as on the whole there existed very little difference in the scores of the public and private sector banks.

The Role of Private Sector Banks in MSME Financing in Kerala

--Parvathy Menon