Abstract

This research study explores the Cost efficiency of Indian Private Sector banks by employing Stochastic Frontier Approach (SFA). This paper empirically evaluated the impact of Information Technology (IT) on the Cost efficiency of the Indian private sector banks .The present study is based on panel data over the period of 2009-2013. For this study, all the 13 old private sector banks and 7 new private sector banks of India are being considered. This study identifies the average cost efficiency of old private sector banks found to be 94.9% and for new private sector banks 82.6% over the entire period of study. The findings of this study suggest that to some extent IT impact the cost efficiency of Indian private sector banks. Some of Old private sector bank cost inefficiency reduced by 28% for the study period by Information Technology (IT) and for New private sector banks cost inefficiency reduced by 11.3% Information Technology (IT). Thus, Information Technology contributes to cost efficiency to both old and new private sector banks.

Keywords:

Cost efficiency, Indian private sector banks, Information Technology (IT), Stochastic Frontier Approach (SFA),

References

Competing interests

The authors have no competing interests.

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The authors have no competing interests.