Topic name
Executive summary
Meaning of productivity
Issue of management
Productivity in Indian banks
Branch productivity
Employees productivity
Information technology


Executive Summary
It is the era of globalization and the business environment is very turbulent. It
is changing drastically. In present environment nothing is permanent except
changes. Changes are likely to take place but with different pace at different
time. External environmental factors like social, cultural, economic, legal,
government policies, technology and competition are uncontrollable. Due to
these, it has become very difficult to carry out the business activities
effectively and efficiently. It is an uphill task to stabilize, grow and excel in
the business performance. In this situation, the need for higher level of
knowledge and skills are needed. Every organization whether big or small, is
using manpower, machine, money and materials. To carry out its tasks
these are needed and without these the tasks cannot be completed. Human
resource is the most important component of an organization. Human
resource has been defined from national point of view, as the total of
knowledge, skills, creative abilities, talents and aptitudes obtained in the
population. Whereas from and individual enterprise point of view, they
represent the total of inherent abilities, acquired knowledge, skills and
aptitudes contained in employees of the enterprise. The human resource is
given increasing significance in modern organization. Obviously, a majority
of the problems in organizational setting are human and social rather than
physical, technical and economic. The failure to recognize this fact causes
great loss to the nation, enterprise and the individual. People at work
comprise a large number of individuals of different sex, age, education
standards and groups. These people at work exhibit not only similar
behaviour patterns and characteristics to a certain degree, but they also
show many dissimilarities. Each individual who works has his own set of
needs, drives, goals and experiences. Management, therefore, must be
aware not only the organizational needs but also needs and goals of
employees. In present scenario under liberalization, privatization and
globalization the companies are facing stiff competition. It has become very
difficult to achieve the objectives and pre decided performance standards.
The companies performing better and before others are taking the lead
in business. To do so the skilled and motivated employees are strongly
needed. They can give more output per person. Their performance can be
measured with the help of labour productivity concept. Productivity is known
as output per person or system. Labour productivity is called output per



Apart from the efforts of myself, the success of the project depends largely on
the encouragement and guidelines of many others. I take this opportunity to
express my gratitude to the people who have been instrumental in the
successful completion of this project.
I would like to show my greatest appreciation to Prof. Ritika Nichani. I can't
say thank you enough for her tremendous support and help. Without her
encouragement and guidance this project would not have materialized. I am
grateful for her constant support and help.




Competition in the banking industry has intensified enormously in recent
years, a trend that can be observed particularly in the fragmented
Indianbanking market. Accordingly, the consolidation of market participants
has proceeded at a steady rate and has crossed national borders and
dimensions. In fact, the pace has even intensified as a result of the current
financial market crises. After establishing large enterprises in several
countries, the industry is witnessing the emergence of banks with a value and
profitability exceeding any size known thus far.

Understanding productivity is essential for banks when considering the fierce
international competition. Yet, how do banks perform in terms of their
productivity? And how can productivity be measured?

Meaning of productivity:
Productivity is a measure of the efficiency of production. Productivity is a ratio
of production output to what is required to produce it (inputs). The measure of
productivity is defined as a total output per one unit of a total input.
The profitability of banks is particularly influenced by two factors: The
respective market conditions regarding competition and price levels as well as
service production capability. The main indicators for evaluating service
capability are productivity and efficiency. The aspects of measuring, analyzing
and optimizing operational performance play a vital role when the decrease of
margins is considered. Especially, the evaluation of productivity and efficiency
of banks is critically important Productivity expresses the relation of output
and input. The measurement is directly based on quantities. Productivity is an
operational ratio which can be easily calculated and compared. Its strong
relatedness to the production process and the consideration of specific input
and output qualities allows for a measurement of the “success” of
transforming input into output. Additionally, productivity can also be measured
under consideration of price components. Thus, several factors with different
dimensions can be aggregated. But monetary assessment of the factors


. Indian financial services industry is dominated by the banking sector that contributes significantly to the level of economic activity. The public sector banks continue to dominate the banking industry. either few working hours or lower costs. on the basis of the recommendations of the Steering Committee set up by RBI. a security transaction is settled and cleared with fewer resources. and preempted 53. more comprehensive and led to sharp changes in various parameters of banking system. Eventually.5% of total deposits. With increased competition. in turn leading to significant growth in deposits and advances. in turn.5 % of incremental deposits. in terms of lending and borrowing. affected the resource position of commercial banks adversely. i. Besides. order volume. for instance. The banking structure in India is broadly classified into public sector banks. restricting their lending and thereby the ability to generate profits.PRODUCTIVITY IN INDIAN BANKS represents only a “support calculation”. The reforms were however. Further. COLLEGE . the restrictions on geographical expansion and ceiling on interest rates were removed. This facilitated the rapid expansion of banking in terms of its geographical reach covering rural India.g. private sector banks and foreign banks. This includes reductions in the CRR and SLR which were as high as 15 % and 38. the SLR got dropped to 25 % and CRR to 4. As a result. 2005. This problem had to be tackled during the nineties by undertaking an array of financial reforms. and it has widely spread out branches which help greatly in pooling up of resources as well as in revenue generation for credit creation. however. ‘Ownership and Governance’ and the implementation of the ‘New Capital Adequacy Framework’ were formulated and issued to banks on February 15. inefficiency and lack of competition caused the non-performing assets in the public sector banks to rise from 14 % in 1969 to 35 % in 1990. declining margins on current K. Experience in banks shows that it is extremely difficult to compare productivity of different banks as distinct and accepted definitions for the main terms (e.e. card transaction) do not even exist.5% respectively in 1991. Deregulation of the Indian financial system in 1991 followed by various financial sector reforms during the period 1990 through 1998 led to a major restructuring of the Indian banking industry2 . By 2005.C. This. These rates were reduced in a series of steps. The role of banks in accelerating economic development of the country has been increasingly recognized since the nationalization of fourteen major commercial banks in 1969 and six more in 1980. A bank is more productive than its competitors if. Measurement of productivity is particularly crucial in process management in order to determine service capability and to identify improvement opportunities. the government used banking sector to finance its own deficit by frequently increasing cash reserve ratios (CRR) and statutory liquidity ratio (SLR).

PRODUCTIVITY IN INDIAN BANKS business operations. technical improvements that increase the productivity of most efficient K. Obtaining a valid measure of output is crucial for modeling bank efficiency. COLLEGE . At this juncture banking sector is immensely competitive and growing in the right trend (Ram Mohan. In the literature. problems related to the measurement of inputs and outputs. The issue of measuring output assumes a special importance in the present case due to the fact that commercial banking is a service industry with all possible complications. have had to spearhead the growth in banking business as they account for an overwhelming share of Rs 13. 2008). With this in view it becomes necessary to ask weather the performance has improved? In what way and how much? The present study is thus focused on the following objectives: • To review. rendering observed revenue flow rather inaccurate as a measure of output.C. These reforms were broadly aimed to improve the performance of banks despite the unexpected global recession and internal disturbances.60. had to face a two pronged challenge. services in banking industry are often priced implicitly on the basis of below market interest rates on deposit balances. • To measure productivity growth in Indian scheduled commercial banks (excluding Regional Rural Banks RRB) wherein. higher costs and greater risks.724 Crs’ as total deposits and Rs 957697 Crs’ as advances as on March. Second. They had on the one hand. increase their ability to serve the nation in new ways with greater efficiency and effectiveness. banking also remains a highly regulated 3 industry in which substantial inefficiencies have been shown to exist. and the nationalized banks in particular. First there is disagreement over which services are produced and how to measure them. banking industry in general. 2007. on the measurement of banking output. • To under take a comparison of efficiency gains across different groups of banks. we identify productivity performance along with technical efficiency. a variety of approaches have been followed and there is no harmony. banking industry had to sustain itself by increased reliance on cost minimization and by ensuring greater efficiency. As a result. among the researchers. to enhance their productivity and on the other. Indian scheduled commercial banks in general. Additionally. Issues in the Measurement of input and Output : Let us now turn to a review of empirical studies dealing with some broadly categorized aspect of the problem relating to the measurement of output. In such a scenario.

The available literature on the identification of inputs and outputs let to the establishment of asset. al. government securities and other non-loan investments are considered to be unimportant outputs. If the financial returns on an asset exceed the opportunity cost of funds or if the financial costs of a liability are less than the opportunity cost. On the asset side. Despite these difficulties it becomes important to analyze the externalities that a bank generates through its roles as the primary financial intermediary and for conduct of monetary policy. banks are viewed as producers of loans and deposits account services using available input. COLLEGE . The complexities involved in measuring income begin with the initial conceptualization of a bank’s output set. because their value-added requirements very low.C. All the three approaches are the variants of intermediation approach. it is difficult to translate this concept into practice for several reasons Barman and Samanta. the cost criterion followed in the production approach does not adequately serve to distinguish financial inputs from financial outputs. The user cost approach determines whether a financial product is an input or an output on the basis of its net contribution to bank revenue. outputs are measured by the number of accounts services as opposed to the rupee value and cost. as they require very small amounts of physical inputs (labour and capital). (1985) first applied the user cost approach. Define bank outputs as behavior. interest expenses are excluded. foreign deposits. obtaining any financial input incurs some labour and capital costs. and other liabilities) are considered as financial inputs to the intermediation process. According to the production approach. Purchased funds (commercial deposits. is the service of accepting deposits an input or an output? What is the price paid by the depositor for indirect banking services such as safe custody and the issuance of cheques? K. (2007). In this approach. (1982) observes that output is measured in terms of what banks in turn form the basis of operating expenses. In a nutshell the user cost of a financial product can be calculated as its holding cost minus the reference rate. user cost and value added approach. then the instrument is considered to be a financial output. Benston. However.PRODUCTIVITY IN INDIAN BANKS firms may not be well reflected in the industry as a whole. According to Mamalakis (1987). Hancock. Under this approach. Again. Both these approach apply tradition micro economic theory of firm to banking and differ in specification of banking activities. and they are included in the deposits as both outputs and inputs of banking. et. There are mainly two approaches for the selection of inputs and outputs the production approach and intermediation approach. which have large expenditure on labour and capital. Since. it is considered to be a financial input Barman. and persists with the issues involved in pricing various inputs and outputs. these measures of output in banking do have serious conceptual and measurement problems3 . (2007). For example. a bank activity that absorbs real resources is bank output. Otherwise.

officers and other employees i. intermediation approach. Therefore. Under the asset approach also called. we use implicit GDP price deflators to obtain the real values of output. we define out put as the rupee value of total loans and total investments at the end of the year. Borrowings include both market borrowings and refinancing. banks are financial intermediaries between liability holders and for those who receive bank funds. In this study. through which the bulk of bank revenue is earned. ie Loans.. which are in particular applicable to Indian Banking industry. and the approach admits no mechanisms for resolving such debates4 . Following intermediation approach. Sealey and Lindley (1977) consider loans and other assets as bank output. We use the following measures: Output : we consider a multiple output and input measures. Since loans and investment generates the bulk of the revenue that banks earn.C. Mamalakis (1987) makes some distinction between the funds intermediation and deposit services of a bank. investments are two outputs. among researchers. we define output as the rupee value of total earning assets. say (Y). as they generate the bulk of the direct revenue that banks earn. loans and investments are output. deposits and other liabilities as inputs to the intermediation process because they provide the raw material of investible funds. COLLEGE . Following intermediation approach. and different researchers more or less agree with the view that earning assets..e.7 Labour Input: We measure labour by no of employees which comprises of all the employees viz.e. how are financial services sold? Are they number of transaction based or quantity of money based? The recognition and assessment of output and prices for these components of intermediation services present many challenges. Fund input is measured by the total rupee value of deposits plus borrowings at the end of the period. Capital input: Capital input is a crucial input in the production process and it is the most complex of all the inputs to measure. whereas the asset approach considers only the former. (b) Rental cost for rented K. Another criticism of this approach is that its grouping of inputs and outputs is arbitrary the choices made by some researchers are disputed by others. i. We use GDP at factor cost as price deflators to deflate the values of outputs and Lonable fund input. the measurement of output of a bank remains a case of disagreement.PRODUCTIVITY IN INDIAN BANKS And. the cost of capital services is calculated as a sum total of (a) Value of owned assets at the end of each period multiplied by PLR of IDBI (Rental cost of owned assets) for calculating the opportunity cost of owned assets. Loanable Fund: Deposits and borrowings are treated as loanable fund input. Thus.. both methodological and empirical. we specify earning assets. clerks and sub staff. as related questions.

It is evidence from the data that performance has really been improved in post-ebanking period at an exciting growth rate in all bank groups and industry at all.1 depicts that during pre-ebanking period.51 crores. employees’ strength has departed but their job has become so important that if not performed well.oriented banks.C. credits. but only G-III witnesses the decline at marginal rate. But. Rs. (C) Cost arising due to depreciation and repairs and maintenance of bank property.e.08 crores average but incompatible with partially IT.14 crores average which is above the industry average i. It is worth mentioning that due to progressive use of technology. G-IV gain a lead by way of the highest average i. during post-ebanking period. Although. total expenditure. Productivity of Indian Banks and Information Technology . establishment expenditure and spread.2. is at lower level with Rs. COLLEGE . even industry. G-III is at a peek with Rs. The improvement is addressed as productivity gap in both averages and it is between one and two Per cent. though get enhanced. Therefore. business. It is not a matter of fact because GIII is already at the top among all bank groups. efficient use of IT strengthens the business surprisingly as proved by performance in post-ebanking period in the following analysis. Table 3.PRODUCTIVITY IN INDIAN BANKS and leased assets.0. Rs.5.An Analysis Employee Productivity: Employee productivity is an important part of total productivity which comprise of per employee productivity means units of production by an individual in terms of deposits.e. Deposits per Employee: Deposits per employee represent the potency of the banks in liquidity support. total income. it is dangerous as well trim down the performance rather to enhance.84 crores only. post-ebanking period is testimony for improved performance of the whole banking industry but partially IT-oriented banks K.5.

In due course. is a more productive stick.9 5.1 1.7 3.9 2.9 1.49 24. Undoubtedly. It is imperative to note that bank groups.5 0.8 ng S.0 4. it is concluded that performance in post-ebanking period has been impressively improved in all bank groups but partially IT-oriented banks are still not harmonized with fully IT-oriented banks.3 5.6 5.2 C.8 2.PRODUCTIVITY IN INDIAN BANKS along with the industry are at larger distance with more variations whereas fully IT-oriented banks have 2 to 3 times more concert with greater stability.02 1.5 2.2 0.5 0.5 0.5 5.0 5.9 2000-01 1.88 Combined 1.5 Avg.9 0.5 ng C. It is whole the transformation effect where IT.8 2. G-IV accounts a greater change (Rs.74 5.2 5.97 crores) in its average in post-ebanking period and hence proved a more end product of transformation through IT.1 5.6 2.33 28.1 6.8 5.8 27.D 0.2 4.9 1.20 29.0 5. Year G-I G-II G-III G-IV Industry 1996-97 0. Here.9 5.3 1.0 2. is transforming the deposits per employee of Indian banking industry with utmost effect on G-IV.3 0.6 0.6 0. Post-ebanking period is steadier than pre-ebanking period. along with other factors.7 3.V.0 5. Productivity 1.4 1.V.8 1.3 3.6 1.5 5.6 1998-99 0.4 1.8 1.2 0.07 32.1 Deposits per Employee Crores) Period (Rs.6 3.8 1. Performance Highlights of IBA (1996-97 to 2006-07) K.6 2003-04 1.C.9 2.9 ebanki Average 1.0 5. it is evident that IT along with other factors.4 2.13 19.0 Source: 1.2 ebanki Average 0.7 0.9 5.6 0.4 2.1 Post 2005-06 2. But still it can’t be ignored that India banking industry has substantiated excellent improvement in post-ebanking period through escalating trend.5 0.1 5.4 1.9 6.2 2.6 4.7 0.8 2004-05 1. with greater stability confirm greater performance. COLLEGE .D 0.4 2006-07 2.0 0.8 Pre – 19990.0 S.1 4.76 2001-02 1.5 0.4 2002-03 1.1 3. (%) 28.0 1.1 0.1.2 -0.22 10.2 1. Table 3. (%) 29.4 4.5 1997-98 0.

2. Overall.0. G-III witnesses the highest average i.06 crores. Hence. COLLEGE .76 crores to Rs.39 crores) but industry substantiate only Rs. are still far away from these banks having 4 to 5 times lesser average.oriented banks but their enhanced average in post-ebanking period is the testimony of their best labors to footstep with these banks.4.73 crores with the lowest variations.1. where again G-IV is at the peek with Rs.2.e. Rs.0. Combined average strengthens the overall efficiency where again fully IToriented banks steal a look.32 crores average having 41 pc variations. Combined average also proves that partially IT-oriented banks even industry. it is concluded that though partially IT-oriented banks are far away from fully IT.2.2 is a visible indication for superior efficiency in post-ebanking period over the pre-ebanking period. Table 3. The average productivity gap.PRODUCTIVITY IN INDIAN BANKS Credits per Employee: Credit per employee shows the efficiency of the banks that how efficiently the banks share out their funds in profitable investments. This augmentation is also the uppermost in fully IToriented banks in contrast of partially IT-oriented banks.C. K. it is confirm that IT along with other factors is the ultimate solution for transforming the efficiency of whole banking industry in India and fully IToriented banks are the end product of this bank transformation.41 crores average which is incompatible with the partially IT. between both the time periods is the testimony for better efficiency in the post. Correspondingly during post-ebanking period. comparatively industry confirms just Rs. During pre-ebanking period.ebanking period over the preebanking period.GIV demonstrate the highest average (Rs. ranging from Rs.oriented banks.06 crores increase.

3 1. Crores) Period Year 1996-97 1997-98 1998-99 Pre – 19992000-01 ebanki Average ng S.6 3.V.9 0.3 0.D ng C. G.V.1 2.87 crores average follow by G-IV having Rs.IV gain a lead by way of Rs.53 0.5 2.4 44.9 0.1 1.91 0.4 0. Combined average also portrays the similar picture where fully IT-oriented banks are outlying the partially IT-oriented banks during the whole study period.31 0.3 0.2 10.83 3.3 3.7.90 crores average against industry and partially IT-oriented banks minutes below Rs.5 0.91 4.1 4.1 1. Table 3.4 1.4 10.8 3. COLLEGE .5 0.7 2. Productivity Source: Same as G-I G-II 0.8 in table 3.0 1.2 0.9.4 0.6 0.5 1.6 0.7 33.6 3.2 0.8 1.8 1. During post-ebanking period. G-III is at a glance with Rs.C.7 0.3 0.9 1.64 32.2 0.7 3.0 0.7 0.9 Business per Employee: Business per employee is a potency of the banks.8 1.7 0.8 2.9 3.3 depict the similar picture where.2 G-IV 1.0 4.4 2.PRODUCTIVITY IN INDIAN BANKS Credits per Employee (Rs.5 3.26 4.1 0. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 2006-07 ebanki Average S.6 3.3 0.56 26. K.5.2 4.7 1.2 0.5 40. a combination of deposits and credits.3 1.1 4.5 4.6 1.1 G-III 2.71 0. lesser variations in distinction of partially IT-oriented banks and industry having poor performance due to higher variations along with other factors.4 0.3 0.4 crores average.1 1. It is imperative to note that fully IT-oriented banks prove greater average.3 4.88 crores average but comparat average shows a poor performance in pre-ebanking period.9 1.3 0.1 31.5 0.3 0.4 0.D C.6 0.3 0.6 1.4 4.3 0. (%) Combined Avg.7 0.0 Industry 0.6 4.4 2.9 0.1 30.4 0.9 2.7 0.5 2.1 1.

9 10.59 2.2 2. The positive slit shows an incessant augmentation in banks’ performance.0 (Rs.6 4.2 G-IV 4.2 1.PRODUCTIVITY IN INDIAN BANKS Table 3.2 0. G.24 2.0 4.8 1.D C.9 3.9 27.D ng C.1 1. Rs.4 1.1 The data is testimony for striking improvement (Rs.4 10.1 2.2.8 1.22 crores even record the highest average of Rs. although fully IT.1 1.V.7 2.7 8.4 1.1 33.8 1. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 – 2006-07 ebanki Average S.0 1.6 2.oriented banks are at a glance with greater average.1 15.V.5 2.1 crore to Rs. IT sustained by some other factors transformation with paramount outcome of IT.5 1. Although.e.8 G-II 1.oriented banks is more steady supporting bigger average.4 2.4. Crores) Industry 0.2 4.31 10. COLLEGE where G-IV is an artifact of .4 crores) in banks’ concert in post-ebanking period over pre-ebanking period.4 27. Entire data concludes that business per employee is the indication of remarkable expansion in post-ebanking period especially in partially IT-oriented banks.08 9.9 9.2 2.65 2.7 6.4 0.9 3.73 1.3 29.1 3.1 0.4 3.5 0.8 0.7 7.9 10.9 9.9 2.04 crores where industry demonstrates Rs.3 30. (%) Combined Avg.4 4.56 8.0 34.0 1.5 9. This is whole due to their pains for stepping up into competition proved by amplified variations but performance of fully IT.5 5.2 5.0 G-III 7.9 32.31 9.1 1.7 9.8 3.5 7.0 6.12 8.6 1.4 1.3 3.0 3.III is grow up by Rs.9 0.8 1. G-IV accounts a noteworthy growth rate i.3 Business per Employee Period Year 1996-97 1997-98 1998-99 1999Pre – 2000-01 ebanki Average ng S.5 4.27 2.0 5.7 0.C. K.9 1.4 2.07 10.0 8.5 4.0 0.1 3.56 2.1 9.16 crores acceleration follow by G-II.53 crores with greater steadiness.4 8.4 7.8.9 1.0 1. Productivity G-I 0.94 8.1.3 9. crores in pre-ebanking period and Rs. Combined average also prop up that fully IT-oriented banks are at the forefront of partially IToriented banks.03 crores all through the whole study period. expenditure of the industry has gone up even though at marginal speed but G-III has proved its potency to cut down its expenditure an optimistic K. In both pre and post ebanking period.10 crores and Rs.11 crores.0.0. It is essential to conclude that.12 crores where industry adds Rs. Table 3. fully IT-oriented banks witness higher averages than partially IT. COLLEGE summit of their better management of expenditure.21crores average respectively in pre and post-ebanking period. Industry shows Rs.78 crores in post-ebanking period. due to IT enrichment.4 demonstrates that fully IT-oriented banks spend at the highest rate as compare to partially IToriented banks.PRODUCTIVITY IN INDIAN BANKS Total Expenditure per Employee: Total expenditure per employee gives an idea about the banks’ spending through the employees for operating the business. Concerns that G-III is the only group performed well to turn down its expenditure by Rs.0.oriented banks where G -IV confirms the highest average that is Rs. Average expenditure gap in pre and post-ebanking period validates a rising pattern where G-IV steals a look with the highest increment of Rs. .C.0.

0 0.2 0.5 0.0 25.PRODUCTIVITY IN INDIAN BANKS Table 3.1 0.0 9.0 G-III 0.0 0.1 0.7 0.22 0.1 .1 0.4 Total Expenditure per Employee Period Year 1996-97 1997-98 1998-99 Pre – 19992000-01 ebanki Average ng S.03 G-IV 0.1 0.5 0.00 0.6 0.0 22.0 0.82 1.2 0.0 9.2 0.6 0.6 -0.0 0.6 0.0 0.4 0.2 0.1 0.1 0.1 0.1 0.2 0.4 0.5 1.59 0.0 0.0 0.1 0.5 0.6 0.6 1. Productivity G-I 0.6 0.1 0.2 0.5 0.8 0.0 14.0 0.0 0.2 0.7 0.6 0.6 0.V.2 0.4 0.1 0.1 0.1 0.D ng C.0 G-II 0.V. Crores) Industry 0.0 0.2 0.1 0.0 30.1 0.2 0. (%) Combined Avg.5 0.2 31.1 0.1 0.00 0.7 0.1 0.6 0.D C.2 0.1 19.1 0.23 0.5 0.1 0.1 0.6 0.4 0.29 0. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 2006-07 ebanki Average S.2 0.7 0.1 (Rs.2 35.0 17.65 0.1 0.1 0.

.0.0. A relative picture of earning per employee in table 3.PRODUCTIVITY IN INDIAN BANKS Total Earning per Employee: Total earnings per employee affirm the banks’ efficiency to make profits through the employees. All bank groups record an improvement where G-IV is at a peak with Rs.22 crores increment and industry confirms Rs. G-IV fleet a look by way of Rs.03 crores in its average earnings per employee. where industry demonstrates just Rs.5 demonstrates that G-III is the peep of pre-ebanking period by means of Rs. The average productivity gap is rationale of enhanced earnings during post-ebanking period.0. Here also.70 crores average and same is the G-IV through Rs. During post-ebanking period.0.23 crores average.69 crores average.0.0.12 crores growth.0.27 pc variations.11 crores average with 27.0. G-III consequences decline of Rs.91 crores average and larger stability but industry observe just Rs. Combined average also confirms that fully IT-oriented banks have the highest average in comparison to partially IT-oriented banks.

2 0.6 0.2 0.0 27.1 0.6 0.1 0.1 0.19 1.1 23.27 0.0 0. .6 0.1 0.oriented banks.08 0.2 0.6 0.V.1 0.2 0. Crores) Industry 0.V.1 0.1 12.1 0.1 0.5 0.1 0.7 0.05 0. a conclusion can be drawn from the facts that fully IT.39 0.0 33. In general.2 32.ebanking period for the reason that average has enhanced in comparison of pre.PRODUCTIVITY IN INDIAN BANKS Table 3.8 0.3 0.0 0.7 0.2 0.2 0. Productivity G-I 0.7 0.1 0.5 1.1 0.1 G-III 0.9 0.0 0.2 0.5 0.1 The data proves the transformation outcome through IT and some other factors in post.6 -0.04 0.oriented banks are at larger expanse from fully IT.0 17.0 1.2 0.IV demonstrates the supreme outcome of IT along with some other factors but G-I is at the smallest amount.09 0.5 0.0 0.ebanking period is steadier than pre-banking period with larger constancy.1 0.2 0.6 91.0 13. still partially IT.1 0.2 0.6 0. G.5 0.0 0.oriented banks have greater average earnings per employee still enlarged in whole banking industry apart from G-III.0 0.0 23.1 0.8 0.33 0.2 (Rs. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 – 2006-07 ebanki Average S.7 0.0 0. (%) Combined Avg.7 0.9 0.7 0.D ng C.5 0.84 0.2 0.1 0.1 0.1 0.1 0.8 0.9 0.1 G-II 0.43 0.03 G-IV 0.oriented banks just about 4-5 times smaller average moreover industry is not as good as fully IT.1 0.1 0.7 0.2 0. Post.D C.1 0.5 Total Earnings per Employee Period Year 1996-97 1997-98 1998-99 1999Pre – 2000-01 ebanki Average ng S.ebanking period.2 0. While.2 0.0 0. average earnings have been improved.0 21.

Combined average also in excellent turn of fully IT-oriented banks where G-I is at the lowest level. 40.67 average where industry again is at lower rank. In preebanking period fully IT-oriented banks are at the top enclosing 52. It is obvious as of table 3.ebanking period against pre-ebanking period established by average gap ranging between 3 and 10 score.89 scores enlargement follow by industry (4. G-IV take a lead by way of 9. The perfection is the end result of transformation where IT along with other factors is renovating the employee productivity at a striking rate with utmost effect on G-IV. . The whole data concludes that post-ebanking period is proved steadier than pre-ebanking period but partially IT-oriented banks still not synchronized with fully IT-oriented banks. G-IV steals a look with 62.PRODUCTIVITY IN INDIAN BANKS Employee Productivity Index: Employee productivity is the collective upshot of different employee productivity factors evaluated in above tables and give an idea about the employee’s efficiency in terms of different aspects.e.78 and 52. It is essential to note that partially IT- oriented banks are at bigger diversity from fully IT-oriented banks which is mostly due to their over employment base and poor IT infrastructure.8 that employee productivity is superior in post.12 average score respectively of G-IV and G-III where industry shows the lowest average i.25 but in compatible with partially IT-oriented banks.93) but still all the bank groups have accomplished more than 4 points growth in their average employee productivity in post-ebanking period. In postebanking period.

2 9.92 42.54 44.2 54.17 9.18 1. That’s why branch productivity is necessary to evaluate in the era of IT to examine that how the branch level productivity is responding? . (%) Combined Avg.2 G-III 49.D C.17 4.16 40.9 4.46 56.2 42.9 5. Productivity G-I 38. IT is playing a vital role in transforming the business so forth branches are not the exceptions.57 40.90 45.71 44.8 Employee Productivity Index Period Year 1996-97 1997-98 1998-99 Pre – 19992000-01 ebanki Average ng S.09 45.15 40. Every branch contributes productivity rigorously to the of a total bank and thus an outcome of all the branches functioning under the same bank. business.45 51.57 40.21 55.1 43.V.17 42.0 5.6 G-IV 47.25 53. A sole branch can twist the portrait of entire business subsequent to evaluate the whole business properly.24 44.7 3.1 42.9 Branch Productivity: Branch productivity.29 39.01 39.5 53.08 3. evaluates branch level productivity means proportionate production of the banks per branch in terms of deposits.74 60. if so.8 43. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 2006-07 ebanki Average S.04 61.91 47.72 2.48 59.6 42.11 54.09 41.50 40.03 55.4 3.01 40.94 45.26 43.37 54.78 41.87 51.41 1.84 48.49 44.70 40.PRODUCTIVITY IN INDIAN BANKS Table 3.8 64.30 55.39 6 7. It is equally important to note that per branch productivity portrays the real picture and hence kicks off the banks to take necessary steps to be in command of the adverse position.61 52.3 4.25 2.42 61.53 4.8 Industry 37.78 5.64 52.2 3.V.01 62.06 43.65 44. a crucial factor of total productivity.67 2.55 63.03 49.5 58.74 42.12 2.86 42.96 46.28 1.7 3.63 54.94 4.11 1.68 44. credits.19 60.8 4.24 45.84 1.21 41.08 44.1 G-II 39. total income.67 43.05 51. total expenditure and establishment expenditure.D ng C.93 47.

38 crores average encompassing greater stability in preebanking period and G-III by means of Rs.PRODUCTIVITY IN INDIAN BANKS Deposits per Branch: Deposits give an idea about the vigor of the banks.00 crores. Somewhat post-ebanking period is steadier and proves greater stability than pre-ebanking period.471. The upgrading in performance of whole banking industry is remarkable but partially IT. although poorer than fully IToriented banks but accounts higher average than partially IT-oriented banks i. Rs.08 crores with larger variations in comparison of other bank groups and industry shows just Rs.189.9.oriented banks still not harmonized with the fully IT-oriented banks and demonstrate 5 to 18 times lesser combined average all through the study period.I explains the least average whereas industry. G. Rs. G-IV demonstrates just about double the average of pre-ebanking period and is at the top with Rs.62 crores improvement in average.e. . it is evident that G-IV witnesses the highest average deposits per branch i.09 crores where industry proves Rs. an inspiring impact of IT along with other factors is the end product for transforming the deposits per branch and the banks put on good quality strength of liquidity through enhanced deposits. In post-ebanking period also. Average productivity gap is a testimony for remarkable improvement in deposits during post-ebanking period by twofold over pre-ebanking period and G-IV steals a look with an excellent growth of Rs. Combined average also depicts the same picture.17.17 crores average.15. is also far behind G-IV.93 crores average.79.e.33.282. The foremost conclusion drawn from the facts is that postebanking period authenticates an excellent growth in average deposits per branch over pre-ebanking period where fully IT-oriented banks above all G-IV substantiate the highest average. From table 3.

Although.12 20. all bank groups and industry substantiate remarkable growth ranging between Rs.55 17.PRODUCTIVITY IN INDIAN BANKS Table 3.ebanking period validates a top position of G-IV (Rs.06 127.67 20.97 G-IV 212.52 crores in average proves an end product of transformation.03 8.11 24.30 15.54 613.93 30.87 24.06 17. has just Rs.10 that G-IV is at the top with Rs.22 79.V.89 12.08 6.42 in table 3.90 26.00 8.55 49. Data is a testimony of such an excellent improvement in average credits per branch during post-ebanking period over preebanking period.185. Rs.8 24.05 19.195. contrary of partially IT-oriented banks. Combined average also depicts the similar picture.196 crores throughout the study period still there is a huge gap between partially and fully IT-oriented banks and even industry have 5 to 20 times lesser average and more variations.82 385.69 33.81 crores average with lesser stability.54 18.05 14.14 164.61 23.66 471. where G-IV witnesses a greater change i.84 383.91 120.93 33.20.71 23.73 26.05 46.83 38.02 26.43 crores average proves an unforeseen gap.10 47.08 82.8 crores and Rs.88 29. (%) Combined Avg.12 272.59 99.98 14.7 4.29 29.88 39.17 98. It is concluded from the data that post-ebanking period records noteworthy progress over pre-ebanking period in all bank .51 15.7 11.07 crores) and industry still proves just Rs.98 21.86 90.20 33.66 13.30 24. post.6 26.3 3.17 438.62 Credits per Branch: It can be seen from table 3.55 crores average even shows the highest variations in pre-ebanking period.V.89 18. little bit higher than partially IT-oriented banks.74 10.93 14.9 Deposits per Branch Period Year 1996-97 1997-98 1998-99 Pre – 19992000-01 ebanki Average ng S.20 80.99 17.18 264.46 19.32 26.7.60 28.88 12.08 25.e.38 3.03 12.46 238.94 367.66 3.56 20.13 22.11 75.51 562.73 154.D C.22 189.14 282.40 33.09 106.07 116.1 G-III 95.09 (Rs.93 19.50 460.9 23. Industry.51 423.381.2 24. (%) 2001-02 2002-03 2003-04 2004-05 24.10 24. Crores) Industry 10.70 13.D C. Correspondingly.87 15.49 121.71 2005-06 2006-07 Average S.34 28. Productivity Source: Same as G-I G-II 10.02 25.

1 G-III 57. Productivity Source: Same as G-I G-II 4. Table 3.40 27.7 1.58 198.29 22.83 534.12 16.V.20 195.46 14.15 13.1 6 1 7.43 73.V.9 4.12 6. (%) Combined Avg.38 .7 11.27 15.10 132.07 104.07 288.97 17.6 7.0 39.7 4. more particularly G-IV.6 6.4 1.35 9.42 11.81 8. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 2006-07 ebanki Average S.49 20.29 21.41 381.11 277.73 18.60 G-IV 153.13 20.45 14.PRODUCTIVITY IN INDIAN BANKS groups where fully IT-oriented banks.9 8.5 7.79 47.65 12. Crores) Industry 5.21 24.74 13.26 127.5 5.40 56.87 166.5 1.42 87.04 36.08 42.6 10.14 17. creep a look and consequently establish the more end product of transformation.73 13.83 119.9 23.D C.37 33.67 8.09 185.13 7.85 15.30 75.25 20.03 26.38 39.22 27.20 10.62 10.94 99.40 30.8 5.2 8.59 27.4 6.D ng C.27 94.40 318.99 278. This is whole because of IT and some other factors.6 26.2 39.55 56.17 394.8 6.2 1 8.52 (Rs.45 292. Indian banking has certainly shifted the performance with utmost effect on G-IV.4 6.47 13.65 12.9 26.53 9.96 471.38 32.42 20.6 in table 3.04 90.0 5.10 Credits per Branch Period Year 1996-97 1997-98 1998-99 Pre – 19992000-01 ebanki Average ng S.

Table 3. G-IV witnesses Rs.467.11 shows that G-IV fleet a look with the uppermost average business Rs.24 crores and industry is at lower level have an average of Rs.63 crores where industry shows just Rs.22.e.81 crores. post. Rs. 20 times lesser than G-IV in pre-ebanking period. Combined average also describes the related image.61 crores growth in average business in post-ebanking period where industry proves growth of about Rs.31 crores merely. . Post-ebanking period demonstrates inspiring enhancement almost twice in excess of pre-ebanking period. Apart from G-I and Industry.ebanking period bears out all bank groups even industry record double average in contrast to pre-ebanking period where also G-IV witnesses the highest average i. Overall. At this juncture. IT with other factors has transformed the business at a greater extent which is really amazing.852. business per branch is improved at an excellent rate of growth but partially IT-oriented banks are at a larger distance from fully IT-oriented banks around 20 times lesser average than G-IV though G-III is also farther from G-IV by 4 times.84 crores. Similarly.384.53.PRODUCTIVITY IN INDIAN BANKS Business per Branch: Business is a total strength of the banks comprises deposits and credits. Even though. all others prove more stability during post-ebanking period. it is concluded that business during post-ebanking period has improved at a remarkable growth rate where G-IV is further end result of transformation with extreme effect of IT along with other factors.

07 41.42 46.ebanking period also.40 292.57 41.55 16.76 20.61 (Rs.63 137.10 66.12 207.PRODUCTIVITY IN INDIAN BANKS Table 3.00 227.62 700.41 21.74 31.87 56.7 25.49 47.84 25. Rs.56 G-IV 365.99 45.22 30.34 23.47 1034. Productivity G-I 14.23 54. Combined average also confirms that fully IT-oriented banks report higher average expenditure per branch because of lesser number of branches.83 31.45 22.62 31.27 26.32 756.0 24. just setting up new branches and prosperous IT infrastructure.58 47.42 165.24 201.D ng C.84 16.38 146.13 29.89 crores average as partially IT-oriented banks steal a look because of lesser average expenditure in pre-ebanking period. in post.46 18.65 22.16 4. The figures in table 3.06 20.73 179.9 21.58 120.05 430.01 13.23 467.70 470.18 22.48 38.e.63 5.66.67 crores while stability is lesser.03 47.70 677.26 39.24 34.38 1147.2.10 crores).56 273.33 207.79 31. While G-II proves the smallest amount of average expenditure i. Crores) Industry 16.97 55.46 29.42 79. partially IT-oriented banks have lesser average expenditure but G-IV take an attention with such an elevated average expenditure (Rs.42 384.26 28.38 G-II 13.21 8.82 53.93 646. Industry records just Rs.06 crores just beneath the industry . Rs.68 23.D C.12 explain that G-IV witnesses the highest average i.1.V.89 19.94 81.85 39. (%) Combined Avg.76 216.07 66. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 – 2006-07 ebanki Average S.51 20.25 34.81 5.15 111. Similarly.74 39.6 855.03 Total Expenditure per Branch: Total expenditure reveals the spending nature of banks for operating business.31 122.52.10 18.50 104.V.47 25.0 852.56 371.39 37.58 27.e.05 G-III 152.47 28.25 35.96 16.92 672.11 Business per Branch Period Year 1996-97 1997-98 1998-99 Pre – 19992000-01 ebanki Average ng S.8 25.96 23.

3 2.3 2.5 4.59 14.32 7.07 50. Therefore.4 1.4 0.01 66.06 52.7 0.05 14.6 1.4 1.3 20.1 3.6 1.7 2. more particularly IT impinge on the business robustly.76 2.8 0.1 7.8 2.05 12.63 78.75 19.00 13.54 49.16 2.27 8.2 2.5 1.01 56.3 2.1.e.0 0.7 G-IV 39.24 58.5 1.20 51.10 12.9 3. Table 3.4 9.2 1. (%) Combined Average Avg.1 3.6 0.4 21.40 17.3 21.39 14.V.1 2.1 1.40 78.2 9.D ng C.37 3.7 1.7 2.3 .4 2.9 10.6 2.13.63 crores average and G-I too is of similar tune because of more number of branches and lower expenditure on IT infrastructure. G-IV witnesses the highest growth i.0 3. Productivity Gap G-I 1.PRODUCTIVITY IN INDIAN BANKS comprising Rs.4 1.8 2.43 crores where industry has Rs.94 9.17 76. Larger average in post.00 2.2 2.6 25.3 2.9 1.9 19. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 2006-07 ebanki Average S.ebanking period.96 28.08 2.25 2.4 2.2 19.29 60.5 0.43 (Rs.8 G-III 12. it is concluded that post-ebanking period accounts soaring expenditure than pre.67 14.3 11. Complete record is the substantiation of escalating trend in per branch expenditure in post. This is complete a transformation effect where amount of factors.6 1.V.ebanking period over pre-ebanking period which is mainly because of ITenhancement. Rs.35 78. Crores) Industry 1.21 4.6 2.67 44.D C.ebanking period is testimony for good amount of expenditure on innovative trends in business where G-IV sneaks a look through the highest average.5 16.9 3. Wrapping up.3 1.5 2. partially IT-oriented banks corroborate almost 7 to 25 times lesser expenditure but witness marginal growth in average expenditure.2 0.50 11.1 1.2.2 0. where G-IV captures a look but partially IT-oriented banks are not spending such account record lesser profits.36 crores expansion.12 Total Expenditure per Branch Period Year 1996-97 1997-98 1998-99 1999-2000 Pre – 2000-01 ebanki Average ng S.5 G-II 1.

still not harmonized with fully IT-oriented banks.IV is at the top due to the highest growth (Rs.34 crores moreover partially IT-oriented banks and industry proves very little growth i. Table 3.e. It is obvious that a good amount of growth is recorded during post-ebanking period essentially due to escalating trend where G.5.13 gives an idea about increasing trend where G-IV is at the top with Rs.1 or Rs. But partially IT-oriented banks by means of about 6 to 25 times lesser average. records impressive amount of earning too whereas partially IToriented banks are earning much lesser though spending the least.14 crores average even above the industry having Rs. .76. Hence. Combined average envisages that G-IV. Definitely. still is far ahead the partially IT-oriented banks and industry. however proves the highest amount of total expenditure.2 crores average in pre-ebanking period.2 crores only. GII records higher stability but lesser average earnings. Rs. it can be concluded that earning efficiency throughout post-ebanking period has really been improved where fully IT-oriented banks more particularly GIV steal a look. In post.55.95 crores average. The imposing growth in post-ebanking period is primarily because of IT along with other factors of transformation where fully IT-oriented banks confirm better efficiency. It is equally important to note that G-IV.21. postebanking period has really established inspiring development in average with larger stability.81 crores) and G-III traces just Rs.PRODUCTIVITY IN INDIAN BANKS Total Earnings per Branch: Total earnings contribute to profitability and hence taken as an efficiency factor of the banks.ebanking period also G-IV steals a look by way of Rs. although spend the largest amount. Throughout pre and post-ebanking period.

48 47. proved through the ongoing analysis.V.0 0.50 2.V.3 1.35 8.3 2.2 3.5 1.59 93.9 1.9 2. structure.6 2.15 55.5 1.6 Information Technology: Revolutionary technological changes and discoveries are having a dramatic impact on every organization.63 16.D C. Superconductivity advancements alone. system.87 2.53 16.0 4.07 73. Productivity G-I 1.21 3.2 1.12 76.6 0.3 G-IV 43.03 2.44 57.5 11.54 54.81 (Rs.9 2. . that increase the power of electrical products are revolutionizing business operations.9 24.7 0.6 1.3 20.00 2. Crores) Industry 1.2 1.56 19. Technological advancements are changing the very nature of opportunities and threats by altering the style.5 2.3 19.78 13.7 0.3 3.03 11.44 70.0 3. (%) Combined Avg.oriented banks are the laggards. Private and foreign banks have been the early adopters of technological innovations while public sector banks are beginning to hold on to the competition. Fully IT-oriented banks are exploring all the opportunities but partially IT.96 92.4 1.9 2. a critical factor in a banks’ ability to improve overall performance in the international market.3 12.6 3.6 0.1 1.95 13. Because of its alarming effect on Indian banks’ too. especially in service sector as banking industry is one of the most effected one.9 20. the whole Indian banking industry has been recommended to opt IT as a crucial factor.0 G-III 14.78 5.D ng C. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 2006-07 ebanki Average S.64 2.82 67.3 19.94 66.7 2.87 2.9 2.5 3.43 20.6 17.73 78.48 8.9 10. IT is acting as a national even global economic engine that is spurring the productivity.6 3.31 13.3 21.79 16.2 9.14 11.4 3.5 4.7 2.7 1.7 1.13 Total Earnings per Branch Period Year 1996-97 1997-98 1998-99 Pre – 19992000-01 ebanki Average ng S.9 3.66 59.44 9.04 21.4 1.9 3.0 0.71 17.0 2.PRODUCTIVITY IN INDIAN BANKS Table 3.2 2.2 G-II 1. culture etc.2 2.5 2.2 1.

43 pc respectively. G-II and industry also witness excellent growth i.31 pc average computerization during post-ebanking period. Combined average also portrays a similar picture where industry has 76. Post-ebanking period confirms remarkable speed of computerization of the branches but still partially IT-oriented banks are not harmonized with fully IT-oriented banks. therefore partially IT-oriented banks should also gain target of full computerization of all the branches and IT should be the potency not be a limitation of these banks.11 pc average during the whole study period.16 depicts the analogous picture as fully IT-oriented banks are fully computerized from birth whereas partially IT-oriented banks have not computerized even 50 pc of the total branches on an average in pre-ebanking period and hence industry also record just 57.57. Partially IT-oriented banks also creep a look recording an admirable growth of nearly 50 pc where G-I proves an explosive improvement i.82 pc in pre-ebanking period to 82.PRODUCTIVITY IN INDIAN BANKS Computerized Branches: Narasimahm Committee-II has recommended full computerization of the branches in 1998.68 pc from 24. . 47. This is also a major factor for superior productivity of these banks. Indian new private sector banks and foreign banks have entered in banking industry in 1996.36 pc and 33.e.e.97 with fully computerized system but public sector banks and old private sector banks are still in mounting stage.50 pc average in post-ebanking period. Table 3.88 pc branches computerized but gains 91.

70 100.00 ebanki Average 24. Technology 57.87 67.94 100.91 100. average although G-III perks up and confirms better record.11 0.88 0.8 1.00 2004-05 88.38 8.00 91.2 0.31 100.00 77.32 100.00 Avg.39 71.16 Computerized Branches as Percentage of Total Branches (Per cent) Period Year G-I G-II G-III 1996-97 0. (%) 90.00 89.00 2003-04 79.94 8.36 23.05 100.00 76.50 56.05 0. Pre-ebanking period show up the average where G-IV fleet a look with 0.00 100.0 2. with greater variations highlights that whole banking industry has gained excellent improvement in ATMs’ installation.0 100.oriented banks have installed ATMs in 1996-97 but G-I in 1997-98 and G-II in 1999-2000.69 100.0 33.71 46.31 13.89 0.17 shows that only fully IT.D 22.00 1997-98 1.D 13.0 C.00 1998-99 34. Post-ebanking period demonstrates outstanding improvement through increasing number of ATMs but not inspiring because all the bank groups apart from G-IV has not been succeeded to install even single ATM .00 60.. where G-IV again takes a lead having average 2 ATMs per branch and record admirable growth.90 19.0 100.00 ng S.10 100.3 0.8 100.22 100.99 0. (%) 16.00 2002-03 72.91 100.0 2001-02 61.V.00 50.00 Pre – 199938.00 49.0 12.96 average ATMs per branch follow by G-III but industry has just negligible average means not even a single ATM for single branch.02 80.00 2006-07 98.00 ebanki Average 82.28 34. Post-ebanking period.V.67 100.1 0.15 100. Table 3.00 90.94 100.16 100.00 57.62 100.67 48.00 90.33 0.22 100.00 2000-01 48.43 IBA Mumbai ATMs: AT M’s are the most compassionate and speedy tool of IT for banking transactions especially for cash withdrawal and mini statement of account.00 S.60 100.PRODUCTIVITY IN INDIAN BANKS Table 3.82 8.80 100. G-IV Industry 100.00 91.0 Combined 56.0 Source: Information collected through IT Dept.8 100.91 37.0 ng C.0 2.68 47.7 100. Combined average establishes similar position.95 20.00 95.6 100.00 Post 2005-06 94.36 0.17 92.28 100.31 0.00 90.0 2.00 51.55 100.

0 0.0 ebanki Average 0.2 0.4 0.0 0.0 1997-98 0.2 0.0 0.0 0.7 0.6 0.8 2.5 1.0 1998-99 0.0 0.4 1.0 9 0 6 4 5 Pre – 19990.3 0.2 0.5 0.2 0.09 71.8 0.5 0.0 0.2 0.33 27.1 0. period confirms remarkable performance due to much effect of IT in terms of different channels as ATMs is one of these channels.1 S.3 ebanki Average 0. rather its not much expensive but makes good amount of income.2 0.8 1.0 C.1 ng C.1 0. (%) 85.00 2001-02 0.2 0.3 0.V.7 2.2 0.0 0. ATMs per Branch Period Years G-I G-II G-III G-IV Industry 1996-97 0.1 0.D 0.0 0.9 0.1 Source: Information collected through IT Dept.92 40.2 0.1 2006-07 0.1 0.8 0.3 0.1 0. post-ebanking period confirms remarkable performance due to much effect of IT in terms of different channels as ATMs is one of these channels.0 ng S.5 2.6 1.0 0.0 2000-01 0.0 2002-03 0.5 0.6 0.18 6.1 0.0 0.8 1. IBA Mumbai .9 0.0 2004-05 0.9 0.0 0.2 0.6 Combined 0.00 22.1 Avg.1 0.3 0.79 58. Technology 0.3 0.0 0.3 0.D 0.oriented banks that are why their performance is comparatively poor.67 50.1 0.71 166.0 2003-04 0.2 0.1 0.1 Post 2005-06 0.0 0. (%) 26.8 0..1 0. Partially IT-oriented banks are still not harmonized with fully IT.PRODUCTIVITY IN INDIAN BANKS per branch. Hence.8 2.3 0.4 1.2 0.7 0.3 1.V.8 0.

PRODUCTIVITY IN INDIAN BANKS Credit Cards per Branch: Credit cards. . In general. Same is the depiction in postebanking period where also G-IV takes a lead by means about 4008 average credit cards per branch. Partially IT-oriented banks and industry trace much lesser average just 14 to 36 cards per branch. a foremost feature of current transformation and these banks gaining the most. Table 3.ebanking period confirms excellent growth in credit cards’ strength especially in G-IV (2166) whereas other bank groups and industry reports not even 20 cards per branch.18 shows that during pre-ebanking period. Post. G-III takes attention by recording average fall of 141. Concerns that stability is more in post-ebanking period consequences improved state of affairs. reporting gap in thousands. Combined average also depicts similar picture. Even though post-ebanking period confirms credit cards but still partially IT-oriented banks are not harmonized with fully IToriented banks more particularly G-IV. has gained momentum share among all IT channels. an excellent version of IT for banking and shopping in market. G-IV is the most admired one for credit cards. evidence from its highest average (nearly 1842 cards per branch) whereas industry records average 16 cards per branch only because partially IT-oriented banks have not even 10 cards per branch an awkward figure.36 cards per branch mainly because of greater plunge during 2004 – 2006 and secondly due to the entrance of two new banks (Yes Bank and Kotak Mohindra Bank). it is concluded that credit cards of fully IT-oriented banks especially G-IV are much admired as compare to partially IT-oriented banks mainly because of their complete dealing is electronically performed.

52 2001-02 16. During post-ebanking period also.4 846.75 -141..54 3729.6 32.49 2002-03 16.68 pc average takes an attention moreover industry records just 14.84 12.5 16.28 3322.23 28.25 166. Technology 11.96 2000-01 16.6 36.79 413.22 ng C.31 pc average.91 ebanki Average 9.27 26.V.47 16.73 23.9 56. Combined average proves that partially IT-oriented banks accounts a larger distance from fully IT-oriented banks nearly 6 to 7 times that are noteworthy.8 1.0 36.8 53.54 542.95 3730.19 3023.98 0.0 20.01 10.4 3.2 15.00 4. IBA Mumbai Internet Banking Branches: Today’s internet banking is also a much popular approach of banking.7 36.78 1051. (%) 39.PRODUCTIVITY IN INDIAN BANKS Table 3.0 0.20 6110.62 6.24 14.95 12.95 21.38 3340.2 22.36 1713.05 1172.V.9 412.36 2166.9 432.30 1841.03 S.1 27.42 2006-07 38.41 ng S.D 8.99 ebanki Average 21.1 191.2 527.2 19.67 31.12 12.64 pc average and industry records just 3.8 675.18 Credit Cards per Branch Period Years G-I G-II G-III G-IV Industry 1996-97 0.52 0.69 483. bank groups perk up average to a great extent where G-III with 74.40 1998-99 13.11 Avg.11 11.41 35.19 demonstrates that G-III fleet a look with 36.06 1081.1 17.8 0.31 Pre – 199914.3 10.02 Post 2005-06 20.04 2003-04 18.D 7.2 17. 12 times lesser in pre-ebanking period bearing numerous variations.37 Combined 16.1 35.72 14.69 3365.27 399. (%) 71.49 1997-98 4.21 576.21 2004-05 19.26 3813.5 4.0 405. Constructive gap confirms an impressive growth in internet- .8 C. This ratio represents an extent of branches providing internet banking services.0 2.82 506. Table 3.0 682.01 462.34 8.62 58.94 4007.87 pc average in compatible of partially IToriented banks.2 604.62 Source: Information collected through IT Dept.18 2381.

37 56.23 79.5 8.9 6.16 36.87 45. Technology G-I 0. it has pitched a banking business to the commanding heights.0 2.87 10.14 40.V.02 9.93 12.6 12.2 2. Overall.35 7.68 20.71 72.72 24.81 36.PRODUCTIVITY IN INDIAN BANKS banking all through post-ebanking period where G-III tops with 38.97 G-III 5.1 45.04 G-IV 8.1 5.64 27.5 9.01 47.98 80.7 33.8 12.1 1. Table 3.64 13.39 38.3 4. along with other factors.8 3.V.48 46.68 6.6 11.56 .19 Internet Banking Branches as Percentage of Total Branches (Per cent) Period Years 1996-97 1997-98 1998-99 Pre – 19992000-01 ebanki Average ng S.54 52.0 3.57 31. Although.00 5.11 43.3 11.67 25.0 4.09 pc expansion and G-IV follows.71 74.D ng C.D C. partially IT-oriented banks witness 11 to 15 pc growth.5 8.98 17.3 1.9 143.66 8.2 3. (%) Combined Avg.69 16. an important artifact of transformation and.06 15.5 45.0 1.62 7.7 13.90 62. It is whole IT’s outcome.21 14.78 13.29 23.47 6.2 2.1 8.81 77.7 16.5 2.0 0.36 G-II 0.58 47.41 6. it is concluded that post-ebanking period is steadier since more average of internet banking and more is the stability as is evidence from the records.94 78.12 27.61 17.0 0.1 1.6 3.88 74.49 42.40 13.25 74.93 51.55 72.14 24.82 10.85 Industry 1.68 75.7 83.22 41.7 57.27 25. but it is not enough since fully IT-oriented banks are 6 to 7 times ahead of these banks and this gap is much higher to be bridged early with effectual efforts.9 15. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 2006-07 ebanki Average S.07 14.37 14.

Combined average also foresees an explosive gap between partially IT-oriented and fully IToriented banks that can’t be ignored. . Gap between pre and post ebanking period signifies growth in mobile banking services in post-ebanking period. the most productive stick of competition.20 highlights the major findings where G-III steals a look with 31. IT. billing and other account related instructions to the banks. II and industry.PRODUCTIVITY IN INDIAN BANKS Mobile Banking Branches: Mobile-banking is also trendy even prior to the internet-banking which is mainly availed for balance checking. Table 3. Rather partially IT-oriented banks are far behind by way of 5 to 7 ti due to greater variations along with other factors. where also fully IT-oriented banks capture a look reporting more than 30 pc growth but partially IT-oriented banks demonstrate not even 15 pc growth.85 pc average comparatively G-I & II and industry view just 2 pc average during pre-ebanking period. Generally.29 pc average about 5 to 7 times more than G-I. Post-ebanking period shows improvement incase of all bank groups where G-III again takes a lead with 70. it is concluded that post. This is due to encouraging contribution of IT.ebanking period is steadier with the utmost effect on G-III. along with other factors is managing tool of transformation that lacks in partially IT-oriented banks.

32 70.2 34.V.4 11.56 13.3 82.0 0.2 0.16 7. although prove 6 to 13 pc growth. a vigor of these banks but a weak point for others.2 6.8 3.85 25.8 1.60 7.1 8.84 24.9 1.29 7.89 20.94 14.35 40. Table 3.5 7.26 82.banking services in all bank groups but G-III take an attention as grew by 27.0 163.59 31.9 40.6 1.9 3.45 22.0 G-II 0.63 37. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 – 2006-07 ebanki Average S.82 G-IV 9.57 13.24 75.31 51.6 2.D ng C.3 3. still not harmonized with fully IT-oriented banks and a major factor is IT.2 11. Combined average also demonstrates almost 30 pc lesser average of partially IT-oriented banks even industry reports just about 6 pc average an alarming gap of nearly 10 times.50 11.8 13.0 0.7 67.29 8.71 21.59 7.73 71. (%) Combined G-I 0.14 45.52 15.78 69.59 13.0 49.8 76.00 44. Overall conclusion drawn from data is that post-ebanking period is an indication of remarkable .3 2.9 8.1 12.65 40.50 4.91 Industry 0. Post-ebanking period confirms striking improvement in tele.55 pc).78 46.50 3.92 5.71 64.19 6.60 69.46 10.8 5. The facts describe that partially IT-oriented banks.4 1.64 pc and industry with just 7. post-ebanking period proves slight upgrading where again G-III is at a peek (51.20 Mobile Banking Branches as Percentage of Total Branches (Per cent) Period Years 1996-97 1997-98 1998-99 Pre – 19992000-01 ebanki Average ng S.22 25.5 Tele-Banking Branches: Tele-banking encourages banking on telephones for limited operations.21 represents comparative view where average share of tele-banking branches of total branches is more in fully IT-oriented banks in pre-ebanking period and industry do not show even 2 pc average having large variations. Comparatively.64 72.4 7.6 1.0 1.74 52.21 56.1 5.PRODUCTIVITY IN INDIAN BANKS Table 3.9 1.91 11.90 55.80 24.0 2.20 25.D C.V.41 79.01 8.17 pc growth is far behind.6 1.9 G-III 4.96 57.6 11.89 46.45 17.

0 23.44 57.8 46.2 2002-03 4.89 3.5 Avg.2 2. (%) 70. fully IToriented banks capture a look with more than 50 scores average whereas industry is at down position with 41.91 65.09 5.31 – 2006-07 16.0 9.61 27.3 ng C.0 0.0 5.7 23.5 38.36 average because partially IT-oriented banks report below 40 scores average with superior stability.1 14.6 ng S.50 22.31 51.89 28. still records 6 to 13 pc growth.7 10.3 8. IBA Mumbai IT Index: IT index is a combination of all e-channels which represents the performance of the banks in IT usage.11 83.6 2003-04 5.0 10.07 0.11 16.7 42.1 ebanki Average 0. During post-ebanking .2 13.7 Pre – 19991.40 8.0 5.32 49.46 22. even having much lesser average.19 27.83 7.8 1.99 1.93 ebanki Average 7.5 16.18 1. All bank groups show more stabling in post-ebanking period but industry proves higher competition witness by increased variations.7 38.88 19.2 18.3 12.67 1.26 45.75 63.86 24.7 9.6 0. Table 3.D 5.55 49.53 10. Table 3.41 7. but not enough to harmonize with later banks.27 1.9 1997-98 0.7 2.96 38.92 44. is touching the whole business with utmost effect on G-III.D 0.4 7..2 8.58 40. (%) 87.2 8.8 S.50 150.75 2001-02 2.V.22 shows that during pre-ebanking period.4 C.3 0.28 42.7 5. It is worth mentioning that IT the most productive apparatus of transformation.71 0.93 58.4 2004-05 6.1 Source: Information collected through IT Dept.69 24.1 16.58 3.75 37.84 47.PRODUCTIVITY IN INDIAN BANKS improvement in tele-banking business in fully IT-oriented banks whereas partially IT-oriented banks.14 2.48 41.91 48.48 Combined 4.6 1998-99 0.30 25. Technology 6.8 2000-01 1.86 43.30 5.4 Post 2005-06 8.V.59 69.21 Tele Banking Branches as Percentage of Total Branches (Per cent) Period Years G-I G-II G-III G-IV Industry 1996-97 0.68 12.2 11.

an outcome of globalization. still confirm impressive improvement but not synchronized with fully IT-oriented banks. IT is the most productive stick to meet the competition and our partially IT-oriented banks also required to be favour for. This is only the way to survive and give strong hand in this competitive environment. partially IT-oriented banks witness smaller average. .PRODUCTIVITY IN INDIAN BANKS period.oriented banks but incompatible with partially IT-oriented banks. Hence. Overall. Combined average concludes that partially IT-oriented banks even industry are laggards by 15 points of fully IT. G-IV leads (62. strength to manage the current transformation. it is concluded that relatively fully IT-oriented banks are much users of IT and individual e-channels like ATMs and Credit Cards are the most popular channels of G-IV whereas internet.oriented banks. mobile and tele-banking services are more preferred of G-III. It demonstrates that fully IT-oriented banks are more technically sound. It is important to note that although. almost 15 points lesser than fully IT. Post-ebanking period is a testimony of volatile growth in IT usage in whole banking industry with admirable response of G-IV which proves 10 scores rise whereas industry grows by just 4 points.04) through a 2 points more average than G-III whereas industry reports 45 scores average. The data proves incessant growth in technology usage for banking services as post-ebanking period is steadier.

91 3.24 1.05 39.6 5.69 60.97 44.98 41.22 8.4 6.65 42.72 45.66 2.89 43.86 48.73 62.47 42.7 57.11 42.D C.62 52.29 58.8 .6 42.0 13. Technology G-I 30.29 41.73 39.PRODUCTIVITY IN INDIAN BANKS Table 3.0 22.96 46.45 46.60 59.58 50.4 43.80 41.51 41.8 4.41 49.04 9.98 45.88 44.4 G-III 40.7 41.5 7.55 62.13 Industry 38.4 43.7 2.1 4.01 44.7 G-II 22.70 48.20 41.25 42.14 43.94 40.V. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 2006-07 ebanki Average S.8 56.47 3.39 44.66 46.03 38.83 57.10 69.00 38.36 1.36 6.22 1.52 57.77 45.29 51.75 45.79 53.34 36.22 IT Index Period Years 1996-97 1997-98 1998-99 Pre – 19992000-01 ebanki Average ng S.40 45.04 4.40 51.44 59.5 G-IV 48.44 2.83 7.51 60.1 2.D ng C.V.8 12.61 61.66 4.11 45.3 57.48 55.52 65.43 10.60 45.37 9. (%) Combined Avg.72 60.93 58.08 49.31 44.76 59.29 38.

a few pioneering banks might adjust quickly to seize the emerging opportunities. As deregulation gathers momentum. while others respond cautiously. . focusing on the efficiency and productivity changes in Indian banking. In reaction to evolving market prospects.PRODUCTIVITY IN INDIAN BANKS Conclusion: The address has have traversed a modest terrain. commercial banks would need to devise imaginative ways of augmenting their incomes and more importantly their fee-incomes so as to raise efficiency and productivity levels. The patterns of efficiency and technological change witnessed in Indian banking can be viewed as consistent with expectations in an industry undergoing rapid change in response to the forces of deregulation.