Efficiency Dilemma: Evaluating the Performance of India's Public Sector Banks.

The global nature of recent financial crises calls for studies on Indian public sector banks (PSBs) with respect to their productivity, efficiency and performance to ensure that past disreputable episodes are not repeated. In this regard, the present study is an empirical attempt to analyze the Indian PSBs for the period 2012-2020 using Stochastic Frontier Approach (SFA), which is one of the popular parametric approaches for estimating technical efficiency and measuring productivity. The study finds that PSBs are not efficient in achieving business goals and pursuing banking growth. Though borrowing and fixed assets are key determinants, its combination with profit goals or bank growth has not been appropriately done. In relation to this, PSBs should pursue attractive deposit policies, efficient risk and exposure management, and optimization of crisis management and communication tools. [ABSTRACT FROM AUTHOR]