Efficiency Analysis of Public and Private Sector Banks in India Using Slack-based Measure of Efficiency

In this article, a consistent decision making model criterion is identified based on coefficient of determination in Data Envelopment Analysis (DEA). The Slack-Based Measure (SBM) of efficiency and non-radial model identified better decision-making units from the variables selected for the analysis. Both public and private sector banks play a crucial role in the Indian financial system, which is indicative of the country's progress. The nation's economy is guided by the potential of the financial system. In contemporary society, the institutional banking sector makes a notable and significant contribution to economic progress. Banking industry can increase financial performance and efficiency by using the DEA models that have been developed and identified. The DEA has been used in this study to assess the effectiveness of banks in the public and private sectors during the fiscal year from 2015-16 to 2018-19. The basic CCR (Charnes, Cooper, and Rhode) model is commonly used to evaluate the effectiveness of DMUs (Decision Making Units) based on recognised characteristics. A scalar measure of efficiency known as the SBM addresses the input surplus and output shortage of certain DMUs. According to the analysis's findings, the best performing PSBs (public sector banks) are CBI, UBI, Punjab & Sind, and IDBI, whereas the best performing Pvt.SBs (private sector banks) are Axis, Yes, ICICI, and South Indian banks in terms of efficiency scores.