The IUP Journal of Accounting Research and Audit Practices:
Scheduled Commercial Banks in India: A Two-Dimensional and Comparative Study of Productivity

Article Details
Pub. Date : April, 2022
Product Name : The IUP Journal of Accounting Research and Audit Practices
Product Type : Article
Product Code : IJARAP10422
Author Name : Inchara P M Gowda
Availability : YES
Subject/Domain : Finance
Download Format : PDF Format
No. of Pages : 33



Productivity and profitability are closely interrelated, and it is almost impossible to improve profitability without improving productivity. This is true even in the case of the banking sector. In this backdrop, the present study aims at measuring and comparing bank productivity from two different dimensions, viz., branch offices and manpower of three ownership groups of Scheduled Commercial Banks (SCBs) in India, viz., Public Sector Banks (PSBs), Private Sector Banks (PVSBs) and branches of Foreign Banks (FBs). For this purpose, the relevant data was collected for 16 years, 2004-05 to 2019-20; and the same was analyzed with the help of ?t?, ?f? and Tukey HSD (Honest Significant Difference) tests, besides using descriptive statistics and compound annual growth rate. The study finds that all the three groups have improved their productivity during the period. However, branch and/or manpower productivity differs across groups. It is also found that the FBs have achieved higher productivity in all the parameters when compared to both the groups of domestic SCBs, except in the two parameters, viz., number of employees per branch office and Total Business per Rupee of Wages (TBPRW). Between the two groups of domestic SCBs, the performance of PVSBs is better compared to that of PSBs on a majority of parameters and for a majority of the years. The present study enables the domestic SCBs to identify the area wherein they need to focus for improving their performance, which in turn improves their productivity, leading to improvement in their profitability.


Financial institutions, in particular banks, play a crucial role in the overall development of economies. This is true even in the case of India. They provide safe and remunerative opportunities for the public (for both natural and corporate citizens) to park their savings/funds and to channelize the funds to different sectors/sections of the economy for financing economic/ revenue-generating activities which in turn contribute to the economic development of the country. Over the years, they have expanded their businesses, both intensively and extensively.