Indian Banking: Emerging Issues and Enhancing Competitive Efficiency.

Indian banking industry has undergone qualitative changes due to banking sector reforms where the well-known parameters have thoroughly changed. The entry of new private sector banks into the Indian banking industry has brought in a torrent of new challenges for Public Sector Banks (PSBs) at a time when they are fighting to survive in this highly competitive environment. Due to this new emerging competition, all Indian banks, especially PSBs, are trying their best to improve their performance and preparing to compete in the emerging global market. In this context, there is a need to examine the efficiency of banks operating in India. This paper is an attempt to study the efficiency of Indian commercial banks during the period 1997-98 to 2007-08. The paper concludes that profitability and productivity were much higher in the case of new private sector banks and foreign banks as compared to Indian PSBs. Even the liquidity position of the new private sector and foreign banks was also sound as compared to their counterparts. This paper suggests some possible measures to improve the efficiency of PSBs. [ABSTRACT FROM AUTHOR]