Can Public Sector Banks Compete with Foreign / Private Banks? A Statistical Analysis
T.A.PAI Management Institute (TAPMI), MANIPAL – 576 104
Udupi District, Karnataka, India, Ph. (Office): 0820 – 257 1358 / 257 3162 / 257 3163
Banking Survey, Efficiency, Financial Strength, Globalization, Profitability,Public Sector, Private and Foreign Banks, Size and Scale, Statistical Techniques, TransitionAnalysis
The economic reforms in India started in early nineties, but their outcome is visible now.Major changes took place in the functioning of Banks in India only after liberalization. Dueto reforms in the 1990s, the depth and width of financial system in India has improved.Though role of banks as financial intermediaries has reduced gradually, market share of banks continues to remain the largest in the financial market (CRIS INFAC Banking Annual Review: August, 2002). Increased competition, new information technologies and therebydeclining processing costs, the erosion of product and geographic boundaries, and lessrestrictive governmental regulations have all played a major role for Public Sector Banks in India to forcefully compete with Private and Foreign Banks. For the last five years, several agencies in India started comparing the working of Industries, B-Schools, Banks, etc. on their performance over the past, through surveys. This, some times gives a feel that pushing a person into waters who has not learnt about swimming and asking him to compete with other professional racers. Keeping this point in mind, theauthors have taken the survey results on banks over a period of time and compared Indian Public Sector Banks among themselves as a closed model and later with other banks as anopen model using various Statistical Techniques like Cluster Analysis.This article deals with clustering the banks during the period of study and then finding out the common features of these clusters. The research also focuses on the factors that made thebanks moving from one cluster to another.
submitted to the International Conference on "
Business & Finance
" to be heldduring 15-16, December 2003 at ICF AI Business School,