Sr. No. Particular Page No.

A Title of the thesis and abstract 1

B “ABrief Description onstudy
comparative the stateon
of the art of the research
financial 2 private and
performance of
INDEX
public
topic
sector banks with special reference to affecting factors and
C Definition
their of the on
impact problem 4
D performance indicators”
Objective and scope of the work 5
E Original contribution by the thesis 6
F SYNOPSIS
Methodology of Research, Result/Comparison 7
G Achievement with respect to objectives 8
H Conclusion 14
Submitted To
I Copies ofTechnological
Gujarat papers published andUniversity
the list of all publications 15
arising from the thesis
J References 16
For The Degree of

Doctor of Philosophy

(Faculty of Management)

Submitted By
Alpesh C. Gajera
Enrollment No. 119997392009
Assistant Professor
Sunshine Group of Institutions

Under The Supervision of

Dr. Vijay Pithadia
Director
Smt. S. H. Gajera MBA Mahila College - Amreli

International Co-Supervisor
Dr. Timotej Jegric

DPC Members
Dr. Sandip Solanki

Dr. Dharmesh Raval

 A. Title of the thesis and abstract

TITLE OF THESIS

“A comparative study on financial performance of private and public sector banks with
special reference to affecting factors and their impact on performance indicators”

ABSTARCT
Research work under this title is divided into two parts (1)
Evaluation of financial performance of private and public
sector banks and (2) Identifying the factors responsible for
better/poor financial performance of private/public sector
banks.
(1) Evaluation of financial performance of private and public sector banks: For
analyzing financial performance of private and public
sector banks all private sector banks (20) as well as all
public sector banks (26) are taken into consideration.
Private sector banks include old private sector banks
(13) as well as new private sector banks (7). Public
sector banks include SBI and its associates (6) as well
as all nationalized banks (20). (As on date of
31/03/2012). To evaluate the financial performance of
above banks 29 financial performance parameters are
selected. Financial data of last 12 years, i.e. from year
2001 - 02 to 2012 - 13 are collected for calculating and
analyzing financial performance parameters.
(2) Identifying the factors responsible for better/poor financial performance of
private/public sector banks. : On the basis of result of financial
performance analysis, second part of research is to carry
forward for identifying the factors responsible for
deviation in financial performance of private and public
sector banks. For identifying the factors responsible for
better/poor financial performance of private/public
sector banks, parameters are decomposed by using their
definitions.

So at the end of these two stage research, I came to know about

the factors responsible for better/poor financial performance

1
 B. Brief Description on the state of the art of the
research topic

It is most important to decide appropriate parameter at the

time of measuring financial performance of banks. Till today
many experts have given their opinion on parameters of
financial performance of banks, even enormous numbers of
research are available on financial performance of banks which
has used different parameters for measuring financial
performance.
In terms of financial performance of banks I would like to add
one more point regarding parameters of financial performance
that time period also play a vital role in terms of selection
of financial parameters. The financial parameters that we
should select in 1990 or before must be different that the
parameters we should select in 2010 -11, as since independent
Indian banking is passing through lots of changes which does
not permit us to evaluate on same parameters.
One more important aspect which one should highlight at the
time of selecting financial performance parameters is
availability of data on selected parameters for desired time
period.

Financial performance of banking industry

Definition of Financial performance

“The performance of banks in India has been assessed by
considering variables, viz. branches, deposits, advances,
investments, spread, burden, business, operating profits, NPA,
cost of deposits, cost of borrowings, cost of funds, return on
advances, return on investments, return on funds, net profit,
spread, burden and operating expenses and sectorial deployment
of credit.”

Suby, B. (2011). Performance of public and private sector banks in Kerala - A comparative study.
Kerala: Mahatma Gandhi University.
For this research work financial performance of banks is
measured by selected financial performance parameters which are
divided into seven heads such as capital adequacy ratios, debt
coverage parameters, balance sheet parameters, management
efficiency parameters, profitability parameters, employee’s
efficiency parameters and non performing assets parameters.

There will be a vast difference in terms of selecting

parameters for financial performance, when we are talking about
financial performance of any individual bank and financial

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performance of banking sector, as Indian banking sector is
divided into different sectors such as SBI and its associates
banks, nationalized banks, old private sector banks, new
private sector banks etc.. .which has some distinct
characteristics in terms of its operations, rules and
regulations etc.
The diversity of Indian banking sector makes it more difficult
for researcher to determine and come up with a final list of
parameters for financial performance of banking sector which
give equal representation to all banks and also depict true
picture about financial performance of Indian banking.
In this research work by going through lots of literature
review, RBI bulletins, RBI database, discussion with panel
members at various occasions of progress review presentation,
discussion with DPC members and guide, I came up with final
list of parameters for measuring financial performance of
banks, which are as under.

> Capital adequacy ratio (BASEL - II)

> Debt coverage parameters
> Balance sheet parameters
> Management efficiency parameters
> Profitability parameters
> Employee efficiency parameters
> Nonperforming assets parameters

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 C. Definition of the problem

By going through literature review in form of research papers

and Ph. D. thesis, I came to know that almost all research
papers are only talking about financial performance of
different sector banks such as private, public, foreign, co
operative or combination there off. I came across hundreds of
research works which are advocating that one sector banks are
performing well compare to other sector banks, but I haven’t
found any research work which extends from evaluation of
financial performance to identifying the reasons or factors
responsible for better or poor financial performance between
different sector of banks.

So my research work is divided into two aspects.

1. Evaluating financial performance of all public sector

banks, including SBI and its associates and nationalized
banks and private sector banks, including old private and
new private sector banks.
2. Identifying the factors responsible for better or
poor financial performance of private or public sector
banks.
This research work will be helpful to readers in terms of
judging financial performance of Indian banks as well as they
will also come to know about the reason behind better or poor
financial performance of banks.

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 D. Objective and scope of the work

This research work is carried out for attaining below mentioned

objectives.

1. To study the financial performance of last 12 years of

public and private sector banks.

2. To identify the parameters in which private/public sector

banks are performing better/poor compare to
private/public sector banks.

3. To identify the factors (reasons) responsible for

better/poor financial performance of private/public
sector banks.
As I have mentioned earlier there are enormous numbers of
research which have analyzed financial performance of different
sector of banks time to time with suitable parameters as per
the objectives that they have stated in their research work.
The scope of work in my Ph. D. work is to extend from
evaluation of financial performance to identifying the reason
or factors responsible for better or poor financial performance
in between different sector of banks.

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 E. Original contribution by the thesis

The thesis on mentioned topic will contribute to the Indian

banking industry as a whole as well as parties associated with
banking industry as mention below.

1. As in this research work financial performance is

evaluated on the basis of current data, it will give the
idea about current position of Indian banking industry.
2. All private sector banks and public sector banks are
included in research. So all bankers can get idea about
their bank’s financial performance.
3. All Bankers and associated parties of banks can also get
comparative analysis of banking industry and compare
their banks with other private and public sector banks of
Indian banking industry.
4. The main contribution of this thesis is identification of
factors responsible for better/poor financial performance
of private/public sector banks. So reader of thesis can
also get information about the reasons behind better/poor
financial performance in particular parameters of their
banks.

6
 F. Methodology of Research, Result/Comparison

Research Methodology includes the assumptions and values, which is

useful for interpreting data and reaching to conclusions.

Any project requires a basic plan of action, or a series of

actions chalked out, in order to accomplish the objectives
effectively and efficiently within a time framework, without
deviating from the original target. In other words we can say
that, from where we are and where we want to go, the process
involved is carefully transformed in to a blue print called the
research design.

In this research three different research design have been used

in parallel, which are as under

1. Descriptive Research Design

As in this research work first task is of determining
financial performance parameters, which is descriptive in
nature as in this research work financial performance of
banks are described with the help of selected parameters.
2. Analytical Research Design
After selecting parameters for measuring financial
performance the next task is to analyze the financial
performance of banks with the help of secondary data
collected on selected parameters. So this part of
research is analytical in nature.
3. Exploratory Research Design
Next task after analyzing financial performance of banks
is to identify the factor responsible for better/poor
financial performance of private/public sector banks. For
identification of factor responsible for better/poor
financial performance of banks exploratory research
design is best suitable.

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 G. Achievement with respect to objectives

This research work is carried out to attain above mentioned

three objectives. The achievement with respect to individual
objective is as under.

1. To study the financial performance of last 12 years of public and private sector
banks.

Activities required to achieve first objective is accomplished

which includes.

a. Deciding parameters for analyzing financial performance.

b. Collecting secondary data for selected parameters to
analyze financial performance.
c. Apply appropriate statistical tools on secondary data to
analyze financial performance.

2. To identify the parameters in which private/public sector banks are performing

better/poor compare to private/public sector banks.

Activities required to achieve second objective is also

accomplished which include.

a. Achieving first objective which is pre-requisite for

achieving second objective.
b. To identify whether there is any significant difference in
the financial performance of private and public sector
banks.
c. Difference in financial performance is identified at three
different level i. e. 1) Identification of difference in
financial performance between banks within sub sector. 2)
Identification of difference in financial performance
between sub sectors and 3) Identification of difference in
financial performance between private and public sector
banks.

3. To identify the factors (reasons) responsible for better/poor financial performance of

private/public sector banks.
Achievement of first and second objectives will automatically
lead to achievement of third and last objective. So there is
nothing new, which needs to be done to achieve this objective.
To achieve this objective factors are identified for
better/poor financial performance of private/public sector

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 Summary of Financial Performance evaluation at three different level
Interbank Comparison
Parameter Parameter Private V/S
Bank Sector comparison within between Remarks
No. Name Public banks
sector sector
comparison
SBI & Its Associate Banks Fail to Reject Difference in
Capital Nationalized Banks Reject performance
1.1 adequacy ratio Old Private Sector Banks Reject Reject Reject identified at all three
(Tier - I) level of evaluation
New Private Sector Banks Reject
SBI & Its Associate Banks Fail to Reject Difference in
Capital Nationalized Banks Reject performance
1.2 adequacy ratio Old Private Sector Banks Reject Reject Reject identified at all three
(Tier - II) level of evaluation
New Private Sector Banks Reject
SBI & Its Associate Banks Fail to Reject Difference in
performance
Cash to Deposit Nationalized Banks Reject Fail to
2.1 Old Private Sector Banks Reject Fail to Reject identified at first
Ratio Reject
level of evaluation
New Private Sector Banks Reject only
SBI & Its Associate Banks Fail to Reject Difference in
performance
Credit to Deposit Nationalized Banks Reject
2.2 Old Private Sector Banks Reject Reject Fail to Reject identified at first
Ratio
two level of
New Private Sector Banks Reject evaluation.
SBI & Its Associate Banks Fail to Reject Difference in
Nationalized Banks Reject performance
Investment to
2.3 Old Private Sector Banks Reject Reject Fail to Reject identified at first
Deposit
two level of
New Private Sector Banks Reject evaluation.
2.4 Ratio of SBI & Its Associate Banks Reject Reject Reject Difference in

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 Deposit to Total Nationalized Banks Reject
Liabilities Old Private Sector Banks Reject performance
identified at all three
New Private Sector Banks Reject level of evaluation
SBI & Its Associate Banks Fail to Reject Difference in
Ratio of Demand Nationalized Banks Fail to Reject performance
Fail to Fail to
2.5 & Saving Bank Old Private Sector Banks Fail to Reject identified at first
Reject Reject
Deposit to total level of evaluation
Deposit New Private Sector Banks Reject only
SBI & Its Associate Banks Reject Difference in
Ratio of Priority Nationalized Banks Reject performance
Fail to
3.1 Sector Advance Old Private Sector Banks Reject Reject identified at first
Reject
to total Advance two level of
New Private Sector Banks Reject evaluation.
SBI & Its Associate Banks Reject Difference in
Ratio of Secured Nationalized Banks Reject performance
3.2 Advance to total Old Private Sector Banks Reject Reject Reject identified at all three
Advance level of evaluation
New Private Sector Banks Reject
SBI & Its Associate Banks Reject Difference in
performance
Ratio of term loan Nationalized Banks Reject Fail to
3.3 Reject identified at first
to total Advance Old Private Sector Banks Reject Reject
two level of
New Private Sector Banks Reject evaluation.
Ratio of SBI & Its Associate Banks Reject
investment in non Nationalized Banks Reject Difference in
3.4 approved Old Private Sector Banks Reject Reject Reject performance
secirities to total identified at all three
Investment New Private Sector Banks Reject level of evaluation
Ratio of Interest SBI & Its Associate Banks Fail to Reject Difference in
Income to Total Nationalized Banks Fail to performance
4.1 Reject Reject
Assets Reject identified at first
Old Private Sector Banks Reject

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 two level of
New Private Sector Banks Fail to Reject evaluation.
SBI & Its Associate Banks Reject Difference in
Ratio of non Nationalized Banks Reject performance
Fail to
4.2 Interest income to Old Private Sector Banks Reject Reject identified at first
Reject
total assets two level of
New Private Sector Banks Reject evaluation.
SBI & Its Associate Banks Fail to Reject Difference in
Ratio of operating Nationalized Banks Reject performance
Fail to Fail to
4.3 profit to total Old Private Sector Banks Reject identified at first
Reject Reject
assets level of evaluation
New Private Sector Banks Reject only
SBI & Its Associate Banks Fail to Reject Difference in
Nationalized Banks Reject performance
5.1 Return on Assets Old Private Sector Banks Reject Reject Reject identified at all three
level of evaluation
New Private Sector Banks Reject
SBI & Its Associate Banks Reject Difference in
Nationalized Banks Reject performance
5.2 Return on Equity Old Private Sector Banks Reject Reject Reject identified at all three
level of evaluation
New Private Sector Banks Reject
SBI & Its Associate Banks Fail to Reject Difference in
Nationalized Banks Fail to Reject performance
Fail to
5.3 Cost of Deposit Old Private Sector Banks Reject Reject identified at first
Reject
two level of
New Private Sector Banks Reject evaluation.
SBI & Its Associate Banks Reject Difference in
Nationalized Banks Reject performance
Cost of
5.4 Old Private Sector Banks Reject Reject Reject identified at all three
Borrowing
level of evaluation
New Private Sector Banks Reject

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 SBI & Its Associate Banks Fail to Reject Difference in
Nationalized Banks Reject Fail to performance
5.5 Cost of Fund Old Private Sector Banks Reject Reject identified at first
Reject
two level of
New Private Sector Banks Reject evaluation.
SBI & Its Associate Banks Fail to Reject Difference in
Nationalized Banks Reject performance
Return on
5.6 Old Private Sector Banks Reject Reject Reject identified at all three
Advance
level of evaluation
New Private Sector Banks Reject
SBI & Its Associate Banks Reject Difference in
Nationalized Banks Reject performance
Return on
5.7 Old Private Sector Banks Reject Reject Reject identified at all three
Investment
level of evaluation
New Private Sector Banks Reject
SBI & Its Associate Banks Fail to Reject Difference in
Nationalized Banks Reject performance
Profit per Fail to
6.1 Reject identified at first
Emloyee (Lakhs) Old Private Sector Banks Reject Reject
two level of
New Private Sector Banks Reject evaluation.
SBI & Its Associate Banks Fail to Reject Difference in
Business per Nationalized Banks Reject performance
Fail to
6.2 Employee Old Private Sector Banks Reject Reject identified at first
Reject
(Lakhs) two level of
New Private Sector Banks Reject evaluation.
SBI & Its Associate Banks Reject Difference in
performance
Wages as % of Nationalized Banks Reject Fail to
6.3 Reject identified at first
Total Expenses Old Private Sector Banks Reject Reject
two level of
New Private Sector Banks Reject evaluation.
6.4 Wages as % to SBI & Its Associate Banks Reject
Reject Fail to Difference in
total Income Nationalized Banks Reject Reject performance

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 Old Private Sector Banks Reject identified at first
two level of
New Private Sector Banks Reject evaluation.
SBI & Its Associate Banks Reject Difference in
Gross NPA as Nationalized Banks Reject performance
Fail to
7.1 percentage of Old Private Sector Banks Reject Reject identified at first
Reject
Gross Advance two level of
New Private Sector Banks Reject evaluation.
SBI & Its Associate Banks Reject Difference in
Gross NPA as Nationalized Banks Reject performance
Fail to
7.2 percentage of Old Private Sector Banks Reject Reject identified at first
Reject
Assets two level of
New Private Sector Banks Reject evaluation.
SBI & Its Associate Banks Reject Difference in
Net NPA as Nationalized Banks Reject performance
Fail to Fail to
7.3 percentage of Net Old Private Sector Banks Reject identified at first
Reject Reject
Advance level of evaluation
New Private Sector Banks Reject only
SBI & Its Associate Banks Reject Difference in
Net NPA as Nationalized Banks Reject performance
Fail to
7.4 percentage of Old Private Sector Banks Reject Reject identified at first
Reject
Assets two level of
New Private Sector Banks Reject evaluation.

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 H. Conclusion

Since 2011 when I have been registered for Ph. D., lots of
changes have been done in my topic. I have given many
presentations at various occasions such as DPCs, Research week
and also learned a lot in research. During these phases I have
also attended various seminars and FDPs which helped me lot to
improve my research work.
After working for four years on this topic I am satisfactorily
able to present it in a form of synopsis. The present study
titled “A comparative study on financial performance of private
and public sector banks with special reference to affecting
factors and their impact on performance indicators” has been
undertaken to analyze the financial performance of all private
and all public sector banks, to compare the financial
performance of private and public sector banks and to identify
the reason behind better/poor financial performance of
public/private sector banks for financial year 2001 - 02 to
2012 - 13.
Financial performances of banks have been analyzed at three
different levels such as interbank comparison within sector,
comparison between sectors and comparison between private and
public sector banks. Differences in performances have been
identified at all level of comparison. Due to different level
of comparison, level of intensity also came out in difference
in financial performance.

14
 I. Copies of papers published and the list of all
publications arising
from the thesis
1. Research Paper on the Title “Financial Performance Evaluation of Private &
Public Sector Banks with Reference to Capital Adequacy Ratio” Published in
“PARIPEX - Indian Journal of Research” in Volume No. 4 (2015), Issue No.
05(May) with
ISSN No. 2250-1991
2. Research Paper on the Title “Makers & Breakers for the Indian
Banking sector in 2013” Published in “Vidyasankul Multidisciplinary
Research Journal” in Volume No. 1 (2014), Issue No. 01(July -
Sep.) with ISSN No. 2350-0107
3. Research Paper on the Title “Employees efficiency analysis of private &
public sector banks of India” Published in “International Journal of
Management, IT and Engineering” in Volume No. 4 (2014), Issue No.
03 (March) with ISSN No. 2249-0558.
4. Research Paper on the Title “A Comparative Financial Analysis of
Indian Banking Sector in context of NPA Management” Published in
“International Journal of Research in Commerce, IT and Management” in
Volume No. 3 (2013), Issue No. 08 (August) with ISSN No.
2231-5756.

15
 J. References
1. Alpesh Gajera, Vijay Pithadia, “Financial Performance Evaluation of
Private & Public Sector Banks with Reference to Capital Adequacy Ratio ”,
PARIPEX - Indian Journal of Research, Volume No. 4 (2015),
Issue No. 05(May) ISSN No. 2250-1991
2. Alpesh Gajera, Vijay Pithadia, “Makers & Breakers for the Indian
Banking sector in 2013”, Vidyasankul Multidisciplinary Research
Journal, Volume No. 1 (2014), Issue No. 01(July - Sep.)
ISSN No. 2350-0107
3. Alpesh Gajera, Vijay Pithadia, “Employees efficiency analysis of
private & public sector banks of India”, International Journal of
Management, IT and Engineering, Volume No. 4 (2014), Issue
No. 03 (March) with ISSN No. 2249-0558.
4. Alpesh Gajera, Vijay Pithadia, “A Comparative Financial Analysis of
Indian Banking Sector in context of NPA Management”, International
Journal of Research in Commerce, IT and Management, Volume
No. 3 (2013), Issue No. 08 (August) with ISSN No. 2231-
5756.
5. Baby, S. (2011). Performance of public and private sector banks in Kerala - A
comparative study. Kerala: Mahatma Gandhi University.

6. Arora, S.; and Kaur, S. (2006), “Financial Performance of

Indian Banking Sector in Post-Reform Era”, The Indian
Journal of Commerce, Vol.59, No.1, pp.96-105.

7. Jain, V. (2006), “Ratio Analysis: An Effective Tool for

Performance Analysis in Banks”, PNB Monthly Review,
November, pp.27-29.

8. Kalita, B. (2004), “Post-1991 Banking Sector Reforms in

India: Policies and Impact”,
http://ssrn.com/abstract=1089020.

9. Jain, V. (2006), “Ratio Analysis: An Effective Tool for

Performance Analysis in Banks”, PNB Monthly Review,
November, pp.27-29.

10. Report on Trend and Progress of Banking in India 2010-

2011.

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