Pure Efficiency Change Growth of Regional Rural Banks in India—Using Malmquist Productivity Index

By : Versha Mohindra , Gian Kaur

Page No: 319-326

Abstract
This article shows the temporal growth rate of pure efficiency change growth of Regional Rural Banks (RRBs) in India for the period from 1991–92 to 2006–07. In addition, it describes the inter-period and inter-bank analysis of PEFFCH growth of RRBs in India. The study has considered a sample of 50 RRBs which have been uninterruptedly operating from 1991-–92 to 2006–07 so as to make a balanced panel data set this study on the productivity growth of RRBs using non-parametric approach; i.e., DEA technique has been undertaken. This study adopts the input-oriented Malmquist productivity index. The empirical findings show that RRBs have registered PEFFCH growth at the rate of 0.54 percent per annum during 1993–2007. The growth rates of PECH and its indices have experienced variations during study years. This may be as RRBs had to bear important and regular policy changes during the study period. As productivity study of banks would be helpful in locating sources of inefficiencies and poor performance, enable all the stakes holders to take a fresh look at their functioning, and initiate suitable strategies measures in achieving these objectives; therefore, it is proposed to conduct research on the same issue.

Authors :
Versh Mohindra : Associate Professor of Economics, D.A.V. College, Hoshiarpur, Punjab.
Gian Kaur : Professor (Punjab School of Economics), Guru Nanak University, Amritsar, Punjab.