International Journal of Financial Management

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Effect of Financial Crisis in Efficiency and Strategic Homogeneity of Indian Commercial Banks: an Empirical Investigation


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1 National Institute of Bank Management
     

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The financial crisis has send shock waves cutting across boundaries and economies. Major economies are still struggling to recover. The cause of the crisis was primarily the inefficiency of the banking system to manage their sub -prime asset class. It reflected the importance of efficiency of the banking system irrespective of the credit rating which signifies its quality of asset class. In the contemporary world economy no economic system can remain isolated. Indian banking system also felt the shock but managed it efficiently. This motivates for a comprehensive analysis to discover whether the so called resilience was due to some policy stimulus or the Indian banking industry is intrinsically efficient. Also, the pattern of grouping of the banks plays an important role in providing stability in the inter-connected system. Thus technical analysis of the banks along with the dynamics of cluster formation after factoring the pre and post financial crisis time periods was studied , so that it can provide valuable inputs in designing strategic outlook regarding the Indian banking industry.

Keywords

Technical Efficiency, DEA, Indian Commercial Banks, Cluster Analysis
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  • Effect of Financial Crisis in Efficiency and Strategic Homogeneity of Indian Commercial Banks: an Empirical Investigation

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Authors

Subroto Chowdhury
National Institute of Bank Management

Abstract


The financial crisis has send shock waves cutting across boundaries and economies. Major economies are still struggling to recover. The cause of the crisis was primarily the inefficiency of the banking system to manage their sub -prime asset class. It reflected the importance of efficiency of the banking system irrespective of the credit rating which signifies its quality of asset class. In the contemporary world economy no economic system can remain isolated. Indian banking system also felt the shock but managed it efficiently. This motivates for a comprehensive analysis to discover whether the so called resilience was due to some policy stimulus or the Indian banking industry is intrinsically efficient. Also, the pattern of grouping of the banks plays an important role in providing stability in the inter-connected system. Thus technical analysis of the banks along with the dynamics of cluster formation after factoring the pre and post financial crisis time periods was studied , so that it can provide valuable inputs in designing strategic outlook regarding the Indian banking industry.

Keywords


Technical Efficiency, DEA, Indian Commercial Banks, Cluster Analysis

References