Productive Efficiency and Non-performing Assets of Indian Banks in the Post-global Financial Crisis Period

South Asia Economic Journal Pub Date : 2021-09-01 DOI:10.1177/13915614211029072

Karan Singh Khati, D. Mukherjee

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Abstract

This study endeavours to augment the existing literature on the productive efficiency of Indian domestic banks in the presence of non-performing assets (NPAs), by employing the Weighted Russell Directional Distance Model (WRDDM). Following the intermediation approach, the banking technology set includes three inputs, three desirable outputs and one undesirable output, namely NPAs. Due to their inherent technological heterogeneity, public sector banks (PSBs) and private banks (PVBs) have been analysed as separate groups. Balanced panels of 26 PSBs and 18 PVBs are constructed from 2010-2011 to 2016-2017. The results indicate a considerable scope of improvement in the productive performance of both categories of banks. The break-up of overall inefficiency into input- and output-specific components reveals some stimulating information. For PSBs, the inefficiencies primarily result due to physical capital, while for PVBs they emerge mainly from other incomes. However, NPAs are also a key contributor to inefficiency for both the categories of banks. The inefficiency scores also indicate that, across ownership categories, medium-sized banks are poorer performers than their smaller and larger counterparts. JEL: C14, C61, D24, G21

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后全球金融危机时期印度银行生产效率与不良资产

本研究试图通过采用加权罗素方向距离模型(WRDDM)来增加现有文献中关于存在不良资产(NPAs)的印度国内银行的生产效率。按照中介方法，银行技术集包括三个输入、三个理想输出和一个不理想输出，即不良资产。由于其固有的技术异质性，公共部门银行(psb)和私人银行(pvb)被作为单独的群体进行分析。从2010-2011年到2016-2017年建造了26个psb和18个pvb的平衡板。结果表明，这两类银行的生产绩效都有相当大的改善范围。将整体效率低下分解为特定于投入和产出的部分，揭示了一些令人振奋的信息。对于邮政储蓄银行来说，效率低下主要是由于实物资本造成的，而对于邮政储蓄银行来说，效率低下主要来自其他收入。然而，不良资产也是导致这两类银行效率低下的一个关键因素。低效率得分还表明，在所有所有权类别中，中型银行的表现都不如规模较小和较大的银行。耶利米:c14, c61, d24, g21

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来源期刊

South Asia Economic Journal Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)

CiteScore

1.10

自引率

0.00%

发文量

期刊介绍： The South Asian nations have progressively liberalized their economies in recent years in an effort to integrate with the world economy. They have also taken steps to enhance multilateral and regional economic integration. Even though the South Asian economies have grown at an average rate of more than 5 per cent over the last few years, roughly 40 per cent of their people still live below the poverty line. Hence, the South Asian region continues to face many challenges of economic and social development. The South Asia Economic Journal (SAEJ) is designed as a forum for informed debate on these issues, which are of vital importance to the people of the region who comprise one-sixth of the world’s population. The peer-reviewed journal is devoted to economic analysis and policy options aimed at promoting cooperation among the countries comprising South Asia. It also discusses South Asia’s position on global economic issues, its relations with other regional groupings and its response to global developments. We also welcome contributions to inter-disciplinary analysis on South Asia. As a refereed journal, SAEJ carries articles by scholars, economic commentators,policy-makers and officials, from both the private and public sectors. Our aim is to create a vibrant research space to explore the multidimensional economic issues of concern to scholars working on South Asia. Among the issues debated in relation to South Asia are: - the implications of global economic trends; - the issues and challenges by WTO; - approaches to industrialization and development; - the role of regional institutions such as the SAARC; - the relationship between SAARC and other regional economic groupings such as ASEAN; - the implications of economic liberalization for trade and investment in the region; - new initiatives that can be launched to enhance economic cooperation among the South Asian countries both on a bilateral and a regional basis.