The Indian banking system is in a better position than ever before in terms of its growth and development. This is in alignment with the importance of balance scorecard. The performance of the banking sector has improved globally over the past few years. This article focuses on the same issue.

The importance of performance evaluation in an organization, for its sustainable growth and development, has been recognized for long. This calls for a system that first measures and evaluates the performance of an organization and then brings out its strengths and weaknesses for the purpose of further improvement. An efficient performance evaluation system encompasses all aspects of an organization. With the advances in computational tools, performance evaluation systems have evolved over a period of time from single-aspect systems to more comprehensive systems covering all aspects of an organization.

Such an improvement was inevitable as the traditional performance measurement systems, with an overwhelming reliance on financial aspects in isolation were ill suited to meet the demands of modern business world characterized by value creation stemming from intangible assets such as employee know-how, strong customer relationship and cultures capable of innovation and change. The notion was simple but the ramifications profound. As a remedy, the organizations around the world began to embrace the Balanced Score Card (BSC) system. Since its introduction by Robert Kaplan, Baker Foundation Professor, Harvard Business School and David Norton, Co-founder and President of the BSC system in 1992, the concept has been hailed as one of the most influential business ideas of the 20th century. Thousands of organizations, spanning every conceivable type and size across the globe, have relied upon it. Moreover, almost every industry that envisages the importance of comprehensive performance evaluation can adopt this concept. Can this tool prove to be better than the existing techniques for performance measurement, evaluation and strategic planning for future growth and development of the Indian banks in the light of changing requirements of this sector?

Apparently, the BSC mechanism addresses the perceived shortcomings in financially-oriented performance measurement systems. It supplements traditional financial measures with non-financial measures focused on at least three other perspectives - customers, internal business processes and learning and growth.

Treasury Management Magazine, Indian Banking Sector, Indian Banking System, Performance Evaluation System, Balanced Score Card System, Business Strategy, Organizational Culture, Corporate Governance, Global Financial Markets, Customer Relationship Management, CRM.