Comparative Performance of Public and Private Sector Banks in Bihar: An Empirical Analysis

The banking sector of India, which is central to the economy, has a dual organization, comprised of the public sector banks (PSBs) and the private sector banks (PVBs), and the underdeveloped economy of Bihar heightens the comparative characteristics. This research compares empirically PSBs and PVBs in Bihar in terms of financial performance, operational efficiency and customer satisfaction and fills regional gaps in analysis as RBI undertakes reforms in 2024-25. Research questions are: (1) How PSBs and PVBs are different on financial measurements such as ROA and NPA ratios? (2) What operational efficiency differences, e.g. digital adoption and branch network? (3) How much customer satisfaction is dissimilar? With the help of a mixed-methods design, the secondary data of Trends and Progress of Banking in India 2023-24 by RBI and bank annual reports of five PSBs (e.g., SBI, PNB) and five PVBs (e.g., ICICI, HDFC) in Bihar were processed through ratios (ROA, CRAR) and efficiency through DEA. Primary data consisted of 300 customer surveys (150 each in Patna, Muzaffarpur and Gaya) on SERVQUAL dimensions Likert scale items, and processed using SPSS to obtain t-tests and ANOVA results. Results indicate that PVBs do better than PSBs in terms of profitability (average ROA 1.4% vs. 0.9% p < 0.01), digital efficiency (68% mobile banking adoption vs. 42%), and rural coverage (72% branches), according to RBI data, whereas PSBs have better asset quality (NPA 4.2% vs. 5.1%) and rural coverage (72% branches). PVBs have a better customer satisfaction (mean 4.1 vs. 3.2, p < 0.001), which can be attributed to responsiveness, whilst PSBs have a higher score in trust (3.8 vs. 3.4). They follow the national trends but emphasize such problems of Bihar as poor financial literacy (45% in rural settings). The paper adds to the body of literature that provides a Bihar-specific framework of DEA coupled with SERVQUAL to generalize efficiency theories to the regional level. Policy implications encourage RBI to encourage PSB digitalization and growth of PVBs in rural areas, and inclusive growth. Weaknesses are cross-sectional data; future studies could attempt to investigate post 2025 fintech impacts. All in all, PVB agility and PSB stability can be used to create balanced reforms that will make Bihar banks resilient.