The study indicates that the productivity performance of public sector bank group has been better than private and foreign bank groups; both public and private sector bank groups are operating under increasing return to scale, while foreign bank group is operating under decreasing return to scale; and the public and private sector bank groups are laborintensive, while foreign bank group is capital-intensive.

Banking institutions play a vital role in the economic development of different countries across the world. Because banking sector constitutes a predominant component of the financial services industry1 and the performance of any economy to a large extent depends on the performance of banks, an efficient and diversified banking system is a must for promoting savings and channelizing them into healthy investments so as to achieve a faster rate of economic growth. Thus, the good health of an economy is reflected by the good health of its banking system. In a modern economy, banks are considered not only as the dealers in money, but also as the leaders of development. For instance, enhanced efficiency in banking can result in greater and more appropriate innovations, improved profitability as well as greater safety and soundness, when the improvement in productivity is channelled towards strengthening capital buffers that absorb risk. Therefore, productivity should be measured to find out the strengths and weaknesses of the banking system and consequently certain necessary preemptive steps should be taken by the regulator to enhance the productivity, profitability and efficiency of the industry. Hence,investigation and measurement of productivity2 in the banking sector have always been areas of interest for economic researchers. So, the present study was made to analyze the productivity and economic efficiency of commercial banks (bank group-wise, i.e., public sector, private sector and foreign banks) using Cobb-Douglas production function, and further, to compare the productivity of sample bank groups using Friedman’s test.

Managerial Economics Journal, Economics of Cloud Computing, Information and Communications Technology Sector, European Economy, Macroeconomic Models, European Small and Medium Size Enterprises, SMEs, Government Agencies, European Health Sector, e-business Skills, Cost Reduction Process, Macroeconomic Literature, Online Services.