Efficiency Analysis of Public and Private Sector Banks in India Using Data Envelopment Analysis

Abstract

This paper aims to empirically analyse the efficiency of public and private sector banks in India. The paper uses data envelopment analysis to measure and compare the efficiency of banks. Three measures of efficiency viz. total technical efficiency, pure technical efficiency and scale efficiency are computed. The paper evaluates and compares the efficiency of public and private sector banks by utilizing the RBI published data set for the period 2015 to 2019. The paper concludes with empirical results that public sector banks are less efficient in terms of total technical efficiency and pure technical efficiency than private sector banks. However, both these sectors have equal scale efficiency.