An Analysis of Banking Efficiency in India: With Reference to Commercial Banks

India’s banking system is going through a crisis of unprecedented nature since 2010. The gross non-performing assets are estimated to be around 9.3 percent of gross loans and advances in 2016/17, having risen from 5 percent a year earlier. Bank credit has been sluggish for the reason that increase in bad loan provisioning and falling net interest incomes have only added to the stress of the banks. The Economic Survey of 2016-17 has highlighted the rising concerns about the rapidly deteriorating deficiency of India’s banks. While the government protects banks in the public sector from any capital inadequacy problems, banks in the private sector and those owned by foreign interests have to face hurdles on their own with no assurance of support of any kind from government. This paper undertakes an empirical study for measuring the efficiency of banks and finds privately owned banks and foreign banks performed a lot better than the public sector banks.