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EVALUATING THE PERFORMANCE OF COMMERCIAL BANKS IN INDIA

D. K. Malhotra

Philadelphia University, USA

E

Raymond Poteau

Philadelphia University, USA

 

Rahul Singh

Birla Institute of Management Technology, India

 

ABSTRACT

In this paper, we analyze the performance of commercial banks in India during the period 2005 to 2009. This period covers the pre-credit crisis and the crisis time period. Specifically, the paper examines the behavior of profitability, cost of intermediation, efficiency, soundness of the banking system, and industry concentration for public and private sector Indian commercial banks. The empirical results show that competition in the Indian banking industry has intensified. While the net interest margin has improved, cost of intermediation is actually rising and banks are responding to the increased costs with higher efficiency levels.

Keywords: Commercial Banks, intermediation, financial crisis, Indian banks, performance evaluation

JEL Codes: G20, G21