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Consolidation in Indian banking: Does size matter?

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  • Asish Saha

    (Universiti Utara Malaysia (UUM))

  • Umakant Dash

    (Indian Institute of Technology Madras)

Abstract

‘Consolidation in Indian banking’ has been on and off in the realm of deliberations of the policy planners of the country. SBI, the largest commercial bank in the country was ranked 64th in the list of Top 1000 Banks in the world by Banker in 2014 and it moved up to the position of 54th rank in 2015. Present paper aims to search for possible justification for consolidation in the Indian banking space by evaluating the efficiency performances of banks including its drivers. Using DEA technique, the efficiency performances of 54 commercial banks in India during the period 2001–2012 were evaluated. Tobit regression analysis using bootstrap corrected efficiency scores was adopted to decipher drivers of efficiency. Findings clearly indicate that “size” does matter significantly in determining the efficiency profile of banks in India.

Suggested Citation

  • Asish Saha & Umakant Dash, 2016. "Consolidation in Indian banking: Does size matter?," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 43(3), pages 223-238, September.
    • Handle: RePEc:spr:decisn:v:43:y:2016:i:3:d:10.1007_s40622-016-0133-5
    DOI: 10.1007/s40622-016-0133-5
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    2. M.V. Leonov, 2021. "Review of Modern Approaches for Assessing the Effectiveness of Banking," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 20(2), pages 294-326.

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    More about this item

    Keywords

    Data envelopment analysis; Banking; Size; Efficiency; Productivity;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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