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Productivity of Indian Commercial Banks in the Pre- and Post-Liberalization Periods


  • H P Mahesh
  • Meenakshi Rajeev


The present study examines the changes in the Total Factor Productivity (TFP) of Indian commercial banks for the period 1985-2004, when TFP indices are estimated using Malmquist productivity index approach. Further, the TFP indices are decomposed into efficiency change and technical change to see what drives the TFP change. The results show that TFP has improved significantly after liberalization across bank groups. Foreign banks have experienced the highest TFP growth for the total study period. The results also suggest that, on an average, the TFP growth is more due to technological change than efficiency change. However, this does not apply to all years. For TFP, growth is due to efficiency change during some years, due to technical change during some years and due to both during some years. This shows that Indian banking sector has experienced efficiency change as well as technical change.

Suggested Citation

  • H P Mahesh & Meenakshi Rajeev, 2007. "Productivity of Indian Commercial Banks in the Pre- and Post-Liberalization Periods," The IUP Journal of Bank Management, IUP Publications, vol. 0(4), pages 17-30, November.
  • Handle: RePEc:icf:icfjbm:v:6:y:2007:i:4:p:17-30

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    Cited by:

    1. Sanyal, Paroma & Shankar, Rashmi, 2011. "Ownership, competition, and bank productivity: An analysis of Indian banking in the post-reform period," International Review of Economics & Finance, Elsevier, vol. 20(2), pages 225-247, April.

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