Year: 2020
Type: article
Abstract: This paper addresses the concerns regarding the sustainability of the banking sector in India prompted by the recent unintended high level of non-performing assets (NPAs). It uncovers the linkage between NPAs and banking efficiency by integrating NPAs into the measurement of bank efficiency to provide a holistic efficiency profile of the Indian banking sector. We apply the general two-stage data envelopment analysis of Kao [16] by incorporating NPAs as an exogenous output from the first stage, and the empirical results identify an efficiency gap of 16.2% due to NPAs in the Indian banking sector for the year 2016. Further, it also documents that the efficiency gap/loss is increasing over the years and differs according to the shareholding pattern of the banks.
Source: Future Business Journal
Authors: K. Hafsal, Anandarao Suvvari, S. Raja Sethu Durai
Institutions: University of Hyderabad, Central University of Andhra Pradesh
Language: English
Field: Decision Sciences
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W3043243151