Competition in Indian Commercial Banking Sector in the Liberalized Regime: an Empirical Evaluation

In this paper, we have measured the degree of competition in Indian banking sector for the period 1997-98 to 2004-05. We have estimated a structural model containing first order condition for profit maximization, coupled with cost function and inverse demand function. Our findings support that the competitive environment of Indian banking sector has improved during the regime of ongoing liberalization and competition has become more severe in the latter two years compared to that in earlier periods.