Consistent Performance in Key Operating Dimensions:A Study of the Selected Public Sector and Private Sector Banks in India

Banks are the integral part of the Indian financial system and they may be characterized as the resilient financial intermediaries as they stood to the testimony of the financial meltdown in the recent past. Banks- public sector and private sector mobilize, lend and invest the funds. These activities are to be carried on viably and consistently since there exists a cut throat competition in the market. The main objective of the banks is to earn income by striking a healthy balance between incomes and expenses. This article analyzes the operating dimensions i.e. incomes, expenses and profits of the ten banks i.e. five each from public sector and private sector for the period from 2005-2011. The objective of the study is to analyze the consistency in performance of the selected banks with regard to their key operating dimensions and to award an overall rank based on the average t-Test score of all ranks secured for each operating dimension. The consistency in performance is assessed with the help of two-tailed t-Test _{7-1, 0.10} = ±1.943. The analysis reveals that Canara Bank (among PSBs) has emerged as the most consistent overall performer in respect of all operating dimensions whereas Kotak Mahindra Bank (among PvtSBs) has exhibited the least consistency in its overall performance during the study period. The main limitation of this study is that the stakeholders may or may not consider the consistency in performance of the selected PSBs and PvtSBs while dealing with them since these banks do not represent the whole Indian banking industry as well as financial system.