A STUDY ON BANKING EFFICIENCY AND ITS IMPACT ON ECONOMIC GROWTH FOR THE STATE OF SIKKIM

An essential aspect of understanding the role of banks in social development is to examine the relationship between banking and economic growth. Banks play an important role in balancing the economic swing by facilitating loan and deposit services, payment systems, and financial intermediation. Hence, gaining insight into the relationship between bank efficiency and economic growth is crucial for ensuring financial stability and promoting sustainable development. The study examines credit and deposit patterns and their relationship with state economic growth. It identifies a relationship between efficiency and growth and investigates how credit and deposits growth affect economic growth. The study reveals the importance of financial intervention in order to foster sustainable economic growth in the long run. Increase in deposits growth have a positive impact; however, rapid credit expansion shows a dampening effect on economic growth. Keywords: Banking Efficiency, Credit, Deposit, Economic growth, Credit Deposit Ratio, Gross Domestic Product, Financial Intermediation