CHAPTER-V FINDINGS AND SUGGESTIONSshodhganga.inflibnet.ac.in/bitstream/10603/38111/12/12_chapter 5.pdf · Bank of Travancore, Oriental Bank of Commerce and Vijaya Bank while lowest

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CHAPTER-V

FINDINGS AND SUGGESTIONS

The present study dealt with “Productivity Analysis of Indian Scheduled Commercial

and Job Satisfaction of Employee”. The study was exploratory as well as diagnostic in

nature. Both primary and secondary data was used for the study. This chapter is divided into

four sections.

1. INTRODUCTION

2. FINDINGS

3. SUGGESTIONS

4. RECOMMENDATION FOR FURTHER RESEARCH

5.1 INTRODUCTION

Productivity is more a measure of performance of labour, which is one of the factors

of production. In case of banks productivity measures the performance of their staff and

efficiency represents the combined performance of staff, capital and management. There are

strong inter-linkages between the performances of the three factors of production: high

productivity of staff will result in efficient utilization of capital, while an efficient

management function would result in superior performance by labour and capital. It would,

therefore, be safe to conclude that when all the key inputs are optimally deployed, the

outcome will be an „efficient‟ bank. Banks form the core of a nation‟s financial system,

performing the vital function of financial intermediation through liquidity, maturity and risk

transformation. Finance is the lifeline of any commercial activity and banks act as a link

between the savers and the borrowers. The productivity and efficiency of banks, thus,

critically impacts the productivity and efficiency of all economic activity11

. So, it is

important to know the productivity of Indian scheduled commercial banks and job

satisfaction of employees. So, the secondary study “Productivity of Indian Scheduled

Commercial Banks” is supplemented by the primary study “Job Satisfaction of

Employees”.

11

“Productivity Trend in Indian Banking in the Post Reform Period- Experience, Issues and Future

Challenges” by Dr. K. C. Chakrabarty, Deputy Governor, Reserve Bank of India at FIBAC 2013, organized by

FICCI and IBA at Mumbai on August 13, 2013.

261

5.2 FINDINGS

Finding Related To Employee Productivity of Public Sector Banks

The main findings relating to employee productivity of public sector banks of the

study are as follow:

All the public sector banks have experienced a rising trend in the profit per employee

productivity for the period 2002-12. The comparison of average profit per employees

productivity in the sub periods (Pre Global Financial Crisis Period: 2002-07, Post

Financial Crisis Period: 2008-12.) indicates more profit per employee in the second

period which show Indian public sector resilient in global financial crisis period. On

the basis of mean of profit per employee IDBI Ltd., Corporation Bank, Oriental Bank

of Commerce, Andhra Bank and Bank of Baroda are top five banks while State Bank

of Mysore, Punjab & Sind Bank, Syndicate Bank, UCO Bank and United Bank of

India are lowest five banks. The highest consistency (low value of coefficient of

variation) in profit per employee productivity was found in IDBI Ltd. followed by

Oriental Bank of Commerce, State Bank of Patiala, Indian Overseas Bank and

Corporation Bank while lowest consistency (high value of coefficient of variation)

was found in Bank of Baroda, Dena Bank, Bank of Maharashtra, Punjab & Sind Bank

and Central Bank of India.

All the public banks have experienced a rising trend in the business per employee

productivity for the period 2002-12. The comparison of average business per

employee in the sub periods (Pre Global Financial Crisis Period or Growth Phase:

2002-07, Post Crisis Period or Global Financial Crisis Phase: 2008-12.) indicates

more business per employee in the second period which show Indian public sector

resilient in global financial crisis period. On the basis of mean of business per

employee IDBI Ltd., Oriental Bank of Commerce, Corporation Bank, Bank of

Baroda, Bank of India are top five banks while Indian Bank, United Bank of India,

State Bank of Mysore, State Bank of India (SBI) and State Bank of Bikaner and

Jaipur are lowest five banks. The highest consistency (low value of coefficient of

variation) in business per employee productivity was found in IDBI Ltd. followed by

Canara Bank, State Bank of Patiala, Oriental Bank of Commerce and State Bank of

India (SBI) while lowest consistency (high value of coefficient of variation) was

262

found in United Bank of India, Indian Bank, Bank of Maharashtra, Punjab & Sind

Bank and Central Bank of India.

All the public banks have experienced a rising trend in the deposit per employee

productivity except four banks (Bank of Maharashtra, Syndicate Bank, State Bank of

Patiala and IDBI Ltd. for the period 2002-12. The comparison of average deposit per

employee in the sub periods (Pre Global Financial Crisis Period: 2002-07, Post

Financial Crisis Period: 2008-12) indicates more deposit per employee in the second

period which show Indian banking sector resilient in global financial crisis period. On

the basis of mean of deposit per employee IDBI Ltd. followed by Oriental Bank of

Commerce, Corporation Bank, Bank of Baroda, Union Bank of India are top five

banks while Central Bank of India, United Bank of India, State Bank of Mysore, State

Bank of India (SBI) and State Bank of Bikaner and Jaipur are lowest five banks. The

highest consistency (low value of coefficient of variation) in deposit per employee

productivity was found in IDBI Ltd., Bank of Maharashtra, State Bank of Patiala,

Oriental Bank of Commerce and State Bank of India (SBI) while lowest consistency

(high value of coefficient of variation) was found in United Bank of India, Indian

Bank, Bank of India, Punjab & Sind Bank and Bank of Baroda.

All the public banks have experienced a rising trend in the advances per employee

productivity for the period 2002-12. The comparison of average advances in the sub

periods (Pre Global Crisis Period: 2002-07, Post Crisis Period: 2008-12.) indicates

more advances per employee in the second period which show Indian banking sector

resilient in global financial crisis period. On the basis of mean of advances per

employee IDBI Ltd., Corporation Bank, Oriental Bank of Commerce, Bank of Baroda

and Union Bank of India are top five banks while Bank of Maharashtra, State Bank of

Bikaner and Jaipur, State Bank of Mysore, Central Bank of India and United Bank of


variation) in advances per employee productivity was found in IDBI Ltd. followed by

Oriental Bank of Commerce, State Bank of Patiala, State Bank of Travancore and

State Bank of India while lowest consistency (high value of coefficient of variation)

was found in Bank of Baroda, United Bank of India, Punjab & Sind Bank, Indian

Bank and Central Bank of India.

263

All the public banks have experienced a rising trend in the total income per employee

productivity for the period 2002-12. The comparison of average total income in the

sub periods (Pre Global Financial Crisis Period: 2002-07, Post Global Financial Crisis

Period: 2008-12.) indicates more total income per employee in the second period

which show Indian banking sector resilient in global financial crisis period. On the

basis of mean of total income per employee IDBI Ltd., Corporation Bank, Oriental

Bank of Commerce, Union Bank of India and Andhra Bank are top five banks while

Bank of Maharashtra, State Bank of Bikaner and Jaipur, State Bank of Mysore,

Central Bank of India and United Bank of India are lowest five banks. The highest

consistency (low value of coefficient of variation) in total income per employee

productivity was found in IDBI Ltd. followed by State Bank of India, Bank of

Maharashtra, Oriental Bank of Commerce and State Bank of Travancore while lowest

consistency (high value of coefficient of variation) was found in Bank of India, UCO

Bank, Punjab National Bank, Indian Bank and Punjab & Sind Bank.

All the public banks have experienced a rising trend in the total expenses per

employee productivity for the period 2002-12. The comparison of average total

expenses per employee in the sub periods (Pre Global Crisis Period: 2002-07, Post

Crisis Period: 2008-12.) indicates more total expenses per employee in the second

period. On the basis of mean of total expenses per employee (low expenses per

employee) IDBI Ltd., Corporation Bank, Oriental Bank of Commerce, Vijaya Bank

and State Bank of Patiala are top five banks while Bank of Maharashtra, Central Bank

of India, State Bank of Bikaner & Jaipur, State Bank of Mysore and United Bank of


variation) in total expenses per employee productivity was found in IDBI Ltd.

followed by State Bank of India, Bank of Maharashtra, State Bank of Hyderabad and

Dena Bank while lowest consistency (high value of coefficient of variation) was

found in Corporation Bank, Central Bank of India, Bank of India, Canara Bank and

Punjab & Sind Bank.

All the public banks have experienced a rising trend in the spread per employee

productivity for the period 2002-12. The comparison of average spread per employee

in the sub periods (Pre Global Crisis Period: 2002-07, Post Crisis Period: 2008-12.)

264

indicates more spread per employee in the second period which show Indian banking

sector resilient in global financial crisis period. It may the outcome of the structure of

Indian banking sector. On the basis of mean of spread per employee IDBI Ltd.,

Corporation Bank, Oriental Bank of Commerce, Andhra Bank and Bank of Baroda

are top five banks while Bank of Maharashtra, Central Bank of India, UCO Bank,

State Bank of Mysore and United Bank of India are lowest five banks. The highest

consistency (low value of coefficient of variation) in spread per employee

productivity was found in Corporation Bank followed by State Bank of Patiala, State

Bank of Travancore, Oriental Bank of Commerce and Vijaya Bank while lowest

consistency (high value of coefficient of variation) was found in Punjab & Sind Bank,

Allahabad Bank, UCO Bank, IDBI Ltd. and Indian Bank.

All the public banks have experienced a fluctuating trend in the burden per employee

productivity for the period 2002-12. The comparison of average burden per employee

in the sub periods (Pre Global Crisis Period: 2002-07, Post Crisis Period: 2008-12.)

indicates more burden per employee in the second period which show Indian banking

sector resilient in global financial crisis period. On the basis of mean of burden per

employee (low burden per employee) Canara Bank, State Bank of Patiala, State Bank

of Hyderabad, Corporation Bank and IDBI Ltd. are top five banks while Punjab &

Sind Bank, Bank of Maharashtra, Syndicate Bank, Central Bank of India and Indian

Overseas Bank are lowest five banks. The highest consistency (low value of

coefficient of variation) in burden per employee productivity was found in IDBI Ltd.

followed by Syndicate Bank, United Bank of India, Indian Bank and Punjab National

Bank while lowest consistency (high value of coefficient of variation) was found in

Dena Bank, Bank of India, Corporation Bank, State Bank of Patiala and State Bank of

Hyderabad.

In public sector banks on the basis of mean and coefficient of variation the employee

productivity (considering all eight indicators) of IDBI Ltd., Oriental Bank of

commerce are top two banks while United Bank of India and Punjab and Sind Bank

are lowest two banks during 2001-12. IDBI Bank's Chairman and Managing Director

R.M. Malla believe that bank improved productivity and efficiency are directly

related to the fresh blood infused after 2004. IDBI Bank have recruited over 11,000

265

people in seven years, which has brought down the overall average age of the bank's

employees to 33 years, the lowest among all public sector banks and comparable to

many private sector banks. That is a remarkable change for a firm that was founded in

1964 as a development financial institution, and converted into a full-fledged public

sector bank - with legacy issues - only in 2004. Initially, IDBI Bank had to rely on

high-cost corporate deposits. But over the past seven years, it has attracted plenty of

retail customers by increasing its branch network, which has resulted in sizeable low-

cost CASA deposits12

.

Finding Related To Employee Productivity of Private Sector Banks

The main findings relating to employee productivity of private sector banks of the

study are as follow:

All the private banks have experienced a rising trend in the profit per employee



Global Financial Crisis Period: 2008-12.) indicates more profit per employee in the

second period which show Indian banking sector resilient in global financial crisis

period. On the basis of mean of profit per employee YES Bank, ICICI Bank, Axis

Bank, HDFC Bank and Indusind Bank are top five banks while Ratnakar Bank,

Lakshmi Vilas Bank, Catholic Syrian Bank, Dhanalakshmi Bank and Development

Credit Bank are lowest five banks. The highest consistency (low value of coefficient

of variation) in profit per employee productivity was found Development Credit

Bank, ICICI Bank, Karnataka Bank, Axis Bank and HDFC Bank while lowest

consistency (high value of coefficient of variation) was found in Catholic Syrian

Bank, YES Bank, ING Vysya Bank, Ratnakar Bank and Dhanalakshmi Bank.

All the private banks have experienced a rising trend in the business per employee



2002-07, Post Global Financial Crisis Period: 2008-12.) indicates more business per

employee in the second period which show Indian banking sector resilient in global

12

“Best Banks and Features”, Business Today, November, 2011.

266

financial crisis period. On the basis of mean of business per employee YES Bank,

ICICI Bank, Axis Bank, HDFC Bank and Indusind Bank are top five banks while

Ratnakar Bank, Catholic Syrian Bank, Dhanalakshmi Bank, Nainital Bank and Kotak

Mahindra Bank are lowest five banks. The highest consistency (low value of

coefficient of variation) in business per employee productivity was found in

Development Credit Bank, Axis Bank, HDFC Bank, ICICI Bank and Kotak Mahindra


South Indian Bank, YES Bank, Catholic Syrian Bank, Tamilnad Mercantile Bank and

Nainital Bank.

All the private banks have experienced a rising trend in the deposit per employee

productivity for the period 2002-12. The comparison of average deposit per employee

in the sub periods (Pre Global Financial Crisis Period: 2002-07, Post Global Financial

Crisis Period: 2008-12.) indicates more deposit per employee in the second period


basis of mean of deposit per employee Indusind Bank, Axis Bank, YES Bank, ICICI

Bank and HDFC Bank are top five banks while Kotak Mahindra Bank, Nainital Bank,

Dhanalakshmi Bank, Catholic Syrian Bank and Ratnakar Bank are lowest five banks.

The highest consistency (low value of coefficient of variation) in deposit per

employee productivity was found in Axis Bank, Development Credit Bank, HDFC

Bank, ICICI Bank and Kotak Mahindra Bank while lowest consistency (high value of

coefficient of variation) was found in Karur Vysya Bank, Catholic Syrian Bank,

Tamilnad Mercantile Bank, Nainital Bank and YES Bank.

All the private banks have experienced a rising trend in the advances per employee

productivity for the period 2002-12. The comparison of average advances in the sub

periods (Pre Global Financial Crisis Period: 2002-07, Post Global Financial Crisis

Period: 2008-12.) indicates more advances per employee in the second period which

show Indian banking sector resilient in global financial crisis period. On the basis of

mean of advances per employee ICICI Bank, YES Bank, Indusind Bank, Axis Bank

and HDFC Bank are top five banks while Development Credit Bank, Dhanalakshmi

Bank, Ratnakar Bank, Catholic Syrian Bank and Nainital Bank are lowest five banks.

The highest consistency (low value of coefficient of variation) in advances per

267

employee productivity was found in Development Credit Bank, HDFC Bank, Axis

Bank, Kotak Mahindra Bank and ICICI Bank while lowest consistency (high value of

coefficient of variation) was found in South Indian Bank, Catholic Syrian Bank,

Nainital Bank, Ratnakar Bank and Tamilnad Mercantile Bank.

All the private banks have experienced a rising trend in the total income per employee



Period: 2008-12.) indicates more total income per employee in the second period


basis of mean of total income per employee ICICI Bank, Ratnakar Bank, Indusind

Bank, YES Bank and Axis Bank are top five banks while City Union Bank, Lakshmi

Vilas Bank, Dhanalakshmi Bank, Nainital Bank and Catholic Syrian Bank are lowest

five banks. The highest consistency (low value of coefficient of variation) in total

income per employee productivity was found in Development Credit Bank, HDFC

Bank, Axis Bank, Indusind Bank and ING Vysya Bank while lowest consistency

(high value of coefficient of variation) was found in Lakshmi Vilas Bank, Federal

Bank, Nainital Bank, YES Bank and Ratnakar Bank.

All the private banks have experienced a rising trend in the total expenses per


expenses per employee in the sub periods (Pre Global Financial Crisis Period: 2002-

07, Post Global Financial Crisis Period: 2008-12.) indicates more total expenses per

employee in the second period which show Indian banking sector resilient in global

financial crisis period. On the basis of mean of total expenses per employee (low

expenses per employee) Lakshmi Vilas Bank, City Union Bank, Dhanalakshmi Bank,

Catholic Syrian Bank and Nainital Bank are top five banks while Ratnakar Bank,

ICICI Bank, Indusind Bank, YES Bank and Axis Bank are lowest five banks. The

highest consistency (low value of coefficient of variation) in total expenses per

employee productivity was found in Development Credit Bank, HDFC Bank, Axis

Bank, Indusind Bank and ING Vysya Bank while lowest consistency (high value of

coefficient of variation) was found in Nainital Bank, Dhanalakshmi Bank, Catholic

Syrian Bank, YES Bank and Ratnakar Bank.

268

All the private banks have experienced a rising trend in the spread per employee



Crisis Period: 2008-12.) indicates more spread per employee in the second period


basis of mean of spread per employee ICICI Bank, YES Bank, Axis Bank, HDFC

Bank, Indusind Bank are top five banks while Development Credit Bank, Lakshmi

Vilas Bank, Dhanalakshmi Bank, Catholic Syrian Bank, Ratnakar Bank are lowest

five banks. The highest consistency (low value of coefficient of variation) in spread

per employee productivity was found in Ratnakar Bank, HDFC Bank, Axis Bank,

Indusind Bank and Dhanalakshmi Bank while lowest consistency (high value of

coefficient of variation) was found in Nainital Bank, ICICI Bank, Lakshmi Vilas

Bank, Federal Bank and YES Bank.

All the private banks have experienced a rising trend in the burden per employee



Crisis Period: 2008-12.) indicates more burden per employee in the second period


basis of mean of burden per employee ( low burden per employee) Karnataka Bank,

Axis Bank, Indusind Bank, ICICI Bank and Ratnakar Bank are top five banks while

Kotak Mahindra Bank, Development Credit Bank, HDFC Bank, Nainital Bank and

ING Vysya Bank are lowest five banks. The highest consistency (low value of

coefficient of variation) in burden per employee productivity was found in Indusind

Bank, Axis Bank, Ratnakar Bank, ICICI Bank and HDFC Bank while lowest

consistency (high value of coefficient of variation) was found in South Indian Bank,

Federal Bank, City Union Bank, YES Bank and Karnataka Bank.

In private sector banks on the basis of mean and coefficient of variation the employee

productivity (considering all eight indicators) Axis Bank, ICICI Bank, HDFC Bank,

Indusind Bank and Jammu & Kashmir Bank were top five banks while Dhanalakshmi

Bank, Lakshmi Vilas Bank, Ratnakar Bank, Nainital Bank and Catholic Syrian Bank

269

were lowest five banks. Axis Bank has emerged the most consistent performer over

an eleven year period.

Finding Related To Employee Productivity of Foreign Banks

The main findings relating to employee productivity of foreign banks of the study are

as follow:

All the foreign banks have experienced a fluctuating trend in the profit per employee



Global Financial Crisis Period: 2008-12.) indicates more profit per employee in the

second period except four banks (Antwerp Diamond Bank, Barclays Bank, State

Bank of Mauritius and Royal Bank of Scotland) which show foreign banks in India

resilient in global financial crisis period. On the basis of mean of profit per employee

JP Morgan Chase Bank, Bank of America, Credit Agricole Bank, Barclays Bank and

Bank of Nova Scotia are top five banks while American Express Banking Co., Oman

International Bank, JSC VTB Bank, Commonwealth Bank of Australia, FirstRand

Bank are lowest five banks. The highest consistency (low value of coefficient of

variation) in profit per employee productivity was found in Oman International Bank,

JSC VTB Bank, FirstRand Bank, Commonwealth Bank of Australia and Standard

Chartered Bank while lowest consistency (high value of coefficient of variation) was

found in Abu Dhabi Commercial Bank, Bank of Bahrain & Kuwait, UBS AG,

American Express Banking Co. and Chinatrust Commercial Bank.

All the foreign banks have experienced a rising trend in the business per employee



2002-07, Post Global Financial Crisis Phase: 2008-12.) indicates more business per

employee in the second period except five banks (Abu Dhabi Commercial Bank,

American Express Banking Co., Bank International Indonesia, Bank of Ceylon,

Mashreq Bank and Oman International Bank) which show foreign banks in India

resilient in global financial crisis period. On the basis of mean of business per

employee Bank of Nova Scotia, Antwerp Diamond Bank, Bank of America, Credit

270

Agricole Bank and Bank of Tokyo Mitsubishi UFJ are top five banks while

Commonwealth Bank of Australia, American Express Banking Co., Bank

International Indonesia, Sonali Bank, United Overseas Bank are lowest five banks.

The highest consistency (low value of coefficient of variation) in business per

employee productivity was found in United Overseas Bank, Citibank, Bank of

Ceylon, Royal Bank of Scotland and Bank of Bahrain & Kuwait while lowest

consistency (high value of coefficient of variation) was found in JSC VTB Bank, JP

Morgan Chase Bank, Barclays Bank, UBS AG and Bank International Indonesia.

All the foreign banks have experienced a fluctuating trend in the deposit per

employee productivity for the period 2002-12. The comparison of average deposit per

employee in the sub periods (Pre Global Financial Crisis Period: 2002-07, Post

Global Financial Crisis Period: 2008-12.) indicates more deposit per employee in the

second period except 8 banks (Abu Dhabi Commercial Bank, American Express

Banking Co., Bank International Indonesia, Bank of Ceylon, credit Agricole Bank,

Chinatrust Commercial Bank, Mashreq Bank and Oman International Bank) which

show foreign banks in India resilient in global financial crisis period. On the basis of

mean of deposit per Abu Dhabi Commercial Bank, JP Morgan Chase Bank, Bank of

Nova Scotia, DBS Bank and Bank of America are top five banks while Bank

International Indonesia, FirstRand Bank, JSC VTB Bank, Commonwealth Bank of

Australia and United Overseas Bank are lowest five banks. The highest consistency

(low value of coefficient of variation) in deposit per employee productivity was found

in Bank of Ceylon, Bank of Bahrain & Kuwait, Citibank, Royal Bank of Scotland and

Antwerp Diamond Bank while lowest consistency (high value of coefficient of

variation) was found Krung Thai Bank, Bank of Tokyo Mitsubishi UFJ, Bank

International Indonesia, Mashreq Bank, American Express Banking Co.

All the foreign banks have experienced an increasing trend in the advances per

employee productivity for the period 2002-12. The comparison of average advances


Crisis Period: 2008-12.) indicates more advances per employee in the second period

except 6 banks (American Express Banking Co., Bank International Indonesia, Bank

of Ceylon, Bank of Bahrain & Kuwait, Krung Thai Bank and Oman International

271

Bank) which show foreign banks in India resilient in global financial crisis period. On

the basis of mean of advances per employee Antwerp Diamond Bank, Bank of Nova

Scotia, Credit Agricole Bank, Bank of Tokyo Mitsubishi UFJ and Bank of America

are top five banks while AB Bank, Bank International Indonesia, Oman International

Bank, Sonali Bank and United Overseas Bank are lowest five banks. The highest

consistency (low value of coefficient of variation) in advances per employee

productivity was found in United Overseas Bank, Citibank, Royal Bank of Scotland,

Bank of America and HSBC while lowest consistency (high value of coefficient of

variation) was found in UBS AG, Oman International Bank, JP Morgan Chase Bank,

Barclays Bank and Bank International Indonesia.

All the foreign banks have experienced a rising trend in the total income per


income in the sub periods (Pre Global Financial Crisis Period: 2002-07, Post Global

Financial Crisis Period: 2008-12.) indicates more total income per employee in the

second period except five banks (Abu Dhabi Commercial Bank, American Express

Banking Co., Bank of Bahrain & Kuwait, Mashreq Bank and Barclays Bank) which


mean of total income per employee Credit Agricole Bank, JP Morgan Chase Bank,

UBS AG, Barclays Bank and Bank of America are top five banks while Bank of

Ceylon, Commonwealth Bank of Australia, JSC VTB BANK, AB Bank and Sonali


variation) in total income per employee productivity was found in United Overseas

Bank, Citibank, Royal Bank of Scotland, Shinhan Bank and Sonali Bank while lowest

consistency (high value of coefficient of variation) was found in UBS AG, JP Morgan

Chase Bank, American Express Banking Co., Bank of Tokyo Mitsubishi UFJ and

Bank International Indonesia.

All the foreign banks have experienced a fluctuating trend in the total expenses per


expenses per employee in the sub periods (Pre Global Financial Crisis Period: 2002-

07, Post Global Financial Crisis Period: 2008-12.) indicates more total expenses per

employee in the second period except five banks (Abu Dhabi Commercial Bank,

272

Bank of Bahrain & Kuwait, Bank of Ceylon, Deutsche Bank and Oman International


the basis of mean of total expenses per employee (low expenses per employee) Bank

International Indonesia, JSC VTB Bank, Bank of Ceylon, AB Bank and Sonali Bank

are top five banks while Mashreq Bank, UBS AG, Credit Agricole Bank, Abu Dhabi

Commercial Bank and FirstRand Bank are lowest five banks. The highest consistency

(low value of coefficient of variation) in total expenses per employee productivity

was found in Commonwealth Bank of Australia, FirstRand Bank, Citibank, Royal

Bank of Scotland, United Overseas Bank while lowest consistency (high value of

coefficient of variation) was found in JSC VTB Bank, Abu Dhabi Commercial Bank,

Bank of Tokyo Mitsubishi UFJ, Bank International Indonesia and Mashreq Bank.

All the foreign banks have experienced a rising trend in the spread per employee



Crisis Period: 2008-12.) indicates more spread per employee in the second period

except 2 banks (American Express Banking Co. and Mashreq Bank) which show

foreign banks in India resilient in global financial crisis period. On the basis of mean

of spread per employee UBS AG, JP Morgan Chase Bank, United Overseas Bank,

Credit Agricole Bank and Bank of America are top five banks while Bank of Bahrain

& Kuwait, AB Bank, American Express Banking Co., Oman International Bank and

Sonali Bank are lowest five banks. The highest consistency (low value of coefficient

of variation) in spread per employee productivity was found in United Overseas

Bank, Shinhan Bank, Antwerp Diamond Bank, Citibank and AB Bank while lowest

consistency (high value of coefficient of variation) was found in Bank International

Indonesia, Mizuho Corporate Bank, American Express Banking Co., Sonali Bank and

Oman International Bank.

All the foreign banks have experienced a decreasing trend in the burden per employee



Crisis Period: 2008-12.) indicates more burden per employee in the second period

which show foreign banks in India resilient in global financial crisis period. On the

273

basis of mean of burden per employee Bank of America, Bank International

Indonesia, Credit Agricole Bank, JP Morgan Chase Bank and Barclays Bank (low

burden per employee) are top five banks while UBS AG, United Overseas Bank,

Mashreq Bank, Commonwealth Bank of Australia and FirstRand Bank are lowest five

banks. The highest consistency (low value of coefficient of variation) in burden per

employee productivity was found in State Bank of Mauritius, Mizuho Corporate

Bank, American Express Banking Co., Oman International Bank and Standard

Chartered Bank while lowest consistency (high value of coefficient of variation) was

found in Shinhan Bank, BNP Paribas, HSBC, Mashreq Bank and Antwerp Diamond

Bank.

In foreign banks on the basis of mean and coefficient of variation the employee

productivity (considering all eight indicators) Citibank, Bank of America, Deutsche

Bank, Antwerp Diamond Bank and Standard Chartered Bank were top five banks

while Commonwealth Bank of Australia, JSC VTB Bank, Krung Thai Bank, Bank

International Indonesia and American Express Banking Co. were lowest five banks.

For a bank growing at over twenty per cent annually, maintaining asset quality can be

tough. But not for Bank of America, which boasts zero per cent net NPA, or non-

performing assets. To keep its NPAs low, the bank uses comprehensive risk

mitigation tools that are a mixture of Reserve Bank of India mandated rules and those

followed by its parent in the US13

.

Finding Related To Branch Productivity of Public Sector Banks

The main findings relating to branch productivity of public sector banks of the study

are as follow:

All the public banks have experienced a rising trend in the profit per branch

productivity for the period 2002-12. The comparison of average profit per branch


Global Financial Crisis Period: 2008-12.) indicates more profit per branch in the

second period which show that Indian public sector banks profit per branch

productivity was not affected by crisis. On the basis of mean of profit per employee

IDBI Ltd., Corporation Bank, Oriental Bank of Commerce, Bank of Baroda and State

13

Best Banks and Features”, Business Today, November, 2011.

274

Bank of Travancore are top five banks while Central Bank of India, Dena Bank, UCO

Bank, Punjab & Sind Bank and United Bank of India are lowest five banks. The

highest consistency (low value of coefficient of variation) in profit per branch

productivity was found in Oriental Bank of Commerce, State Bank of Patiala,

Corporation Bank, State Bank of India (SBI) and Indian Overseas Bank while lowest

consistency (high value of coefficient of variation) was found in Bank of Baroda,

Dena Bank, Bank of Maharashtra, Punjab & Sind Bank and Central Bank of India.

All the public banks have experienced a rising trend in the business per branch

productivity for the period 2002-12. The comparison of average business per branch

in the sub periods (Pre Global Financial Crisis Period or Growth Phase: 2002-07, post

Global Financial Crisis Phase: 2008-12.) indicates more business per branch in the

second period which show Indian public sector banks resilient in global financial

crisis period. On the basis of mean of business per branch IDBI Ltd., Corporation

Bank, Oriental Bank of Commerce, Canara Bank and Bank of India are top five banks

while Bank of Maharashtra, Punjab & Sind Bank, Dena Bank, Allahabad Bank and

United Bank of India are lowest five banks. The highest consistency (low value of

coefficient of variation) in business per branch productivity was found in IDBI Ltd.,

Canara Bank, State Bank of India (SBI), Union Bank of India and State Bank of

Patiala while lowest consistency (high value of coefficient of variation) was found in

State Bank of Mysore, Punjab & Sind Bank, Bank of Maharashtra, Allahabad Bank

and Central Bank of India.

All the public banks have experienced a rising trend in the deposit per branch

productivity for the period 2002-12. The comparison of average deposit per branch in

the sub periods (Pre Global Crisis Period: 2002-07, Post Crisis Period: 2008-12.)

indicates more deposit per branch in the second period which show Indian public

sector banks resilient in global financial crisis period. On the basis of mean of deposit

per branch IDBI Ltd., Corporation Bank, Canara Bank, Oriental Bank of Commerce

and Bank of Baroda are top five banks while Allahabad Bank, Dena Bank, United

Bank of India, Central Bank of India, Bank of Maharashtra are lowest five banks. The

highest consistency (low value of coefficient of variation) in deposit per branch

productivity was found in State Bank of India (SBI), IDBI Ltd., Bank of Maharashtra,

275

State Bank of Patiala and Indian Overseas Bank while lowest consistency (high value

of coefficient of variation) was found in State Bank of Mysore, Dena Bank, Bank of

Baroda, Allahabad Bank and Punjab & Sind Bank.

All the public banks have experienced a rising trend in the advances per branch

productivity for the period 2002-12. The comparison of average advances per branch


Crisis Period: 2008-12.) indicates more advances per branch in the second period

which show Indian public sector banks resilient in global financial crisis period. On

the basis of mean of advances per branch IDBI Ltd., Corporation Bank, Canara Bank,

Oriental Bank of Commerce and Bank of Baroda are top five banks while Allahabad

Bank, Dena Bank, Central Bank of India, Bank of Maharashtra and United Bank of


variation) in advances per branch productivity was found in IDBI Ltd., State Bank of

Patiala, State Bank of India (SBI), Oriental Bank of Commerce and Canara Bank

while lowest consistency (high value of coefficient of variation) was found in Dena

Bank, Bank of Baroda, Allahabad Bank, United Bank of India and Punjab & Sind

Bank.

All the public banks have experienced a rising trend in the total income per branch



Period: 2008-12.) indicates more total income per branch in the second period which

show Indian public sector banks resilient in global financial crisis period. It may the

outcome of the structure of Indian banking sector. On the basis of mean of total

income per branch IDBI Ltd., Corporation Bank, Oriental Bank of Commerce, State

Bank of India (SBI) and Canara Bank are top five banks while Allahabad Bank, Dena

Bank, United Bank of India, Bank of Maharashtra and Central Bank of India are

lowest five banks. The highest consistency (low value of coefficient of variation) in

total income per branch productivity was found in IDBI Ltd., State Bank of India

(SBI), Bank of Maharashtra, Oriental Bank of Commerce and Indian Overseas Bank

while lowest consistency (high value of coefficient of variation) was found in Punjab

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National Bank, UCO Bank, State Bank of Mysore, Punjab & Sind Bank and

Allahabad Bank.

All the public banks have experienced a rising trend in the total expenses per branch

productivity for the period 2002-12. The comparison of average total expenses per

branch in the sub periods (Pre Global Financial Crisis Period: 2002-07, Post Global

Financial Crisis Period: 2008-12.) indicates more total expenses per branch in the

second period which show Indian banking sector resilient in global financial crisis

period. On the basis of mean of total expenses per branch Allahabad Bank, Dena

Bank, United Bank of India, Central Bank of India and Bank of Maharashtra are top

five banks while IDBI Ltd., Oriental Bank of Commerce, Canara Bank, State Bank of

India (SBI) and Corporation Bank are lowest five banks. The highest consistency

(low value of coefficient of variation) in total expenses per branch productivity was

found in State Bank of India (SBI), IDBI Ltd., Bank of Maharashtra, Indian Bank and

United Bank of India while lowest consistency (high value of coefficient of variation)

was found in Corporation Bank, State Bank of Patiala, State Bank of Mysore,

Allahabad Bank and Punjab & Sind Bank.

All the public banks have experienced a rising trend in the spread per branch

productivity for the period 2002-12. The comparison of average spread per branch in

the sub periods (Pre Global Financial Crisis Period: 2002-07, Post Global Financial

Crisis Period: 2008-12.) indicates more spread per branch in the second period which

show Indian public sector banks resilient in global financial crisis period. On the basis

of mean of spread per branch IDBI Ltd., State Bank of India (SBI), Corporation

Bank, Oriental Bank of Commerce and Bank of Baroda are top five banks while UCO

Bank, Dena Bank, Bank of Maharashtra, United Bank of India and Central Bank of


variation) in profit per employee productivity was found in Corporation Bank, Vijaya

Bank, Indian Overseas Bank, State Bank of Patiala and Oriental Bank of Commerce

while lowest consistency (high value of coefficient of variation) was found in UCO

Bank, State Bank of Mysore, Indian Bank, Allahabad Bank and IDBI Ltd.

All the public banks have experienced a fluctuating trend in the burden per branch

productivity for the period 2002-12. The comparison of average burden per branch in

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the sub periods (Pre Global Crisis Period: 2002-07, Post Crisis Period: 2008-12.)

indicates more burden per branch in the second period which show Indian public

sector banks resilient in global financial crisis period. On the basis of mean of burden

per branch IDBI Ltd., Dena Bank, State Bank of Hyderabad, Corporation Bank and

State Bank of Patiala are top five banks while State Bank of India (SBI), Syndicate

Bank, Indian Overseas Bank, Punjab & Sind Bank and Bank of Maharashtra are


burden per branch productivity was found in IDBI Ltd., Syndicate Bank, Indian Bank,

United Bank of India and Punjab National Bank while lowest consistency (high value

of coefficient of variation) was found in Dena Bank, Bank of India, State Bank of

Patiala, State Bank of Hyderabad and Corporation Bank.

On the basis of mean and coefficient variation the branch productivity (considering

all eight indicators) of IDBI Ltd. was highest and consistent in public sector banks

during 2001-12. The IDBI Ltd., Oriental Bank of Commerce, State Bank of India

(SBI), State Bank of Patiala, Canara Bank are top five banks and Dena Bank, United

Bank of India, Andhra Bank, Central Bank of India and Punjab & Sind Bank are

lowest five banks regarding branch productivity in public sector banks during the

study period.

Finding Related To Branch Productivity of Private Sector Banks

The main findings relating to branch productivity of private sector banks of the study

are as follow:

All the private banks have experienced a rising trend in the profit per branch


productivity in the sub periods (Pre Global Crisis Period: 2002-07, Post Crisis Period:

2008-12.) indicates more profit per branch in the second period except four banks

which show Indian private sector banks resilient in global financial crisis period.

These four banks are Catholic Syrian Bank, Dhanalakshmi Bank, ICICI Bank and

IndusInd Bank. On the basis of mean of profit per branch YES Bank, ICICI Bank,

Kotak Mahindra Bank, Axis Bank and HDFC Bank are top five banks while Ratnakar

Bank, Lakshmi Vilas Bank, Catholic Syrian Bank, Dhanalakshmi Bank and

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Development Credit Bank are lowest five banks. The highest consistency (low value

of coefficient of variation) in profit per employee productivity was found

Development Credit Bank, Kotak Mahindra Bank, Karnataka Bank, Axis Bank and

HDFC Bank while lowest consistency (high value of coefficient of variation) was

found in Catholic Syrian Bank, Indusind Bank, ING Vysya Bank, Ratnakar Bank and

Dhanalakshmi Bank.

All the private banks have experienced a rising trend in the business per branch


in the sub periods (Pre Global Crisis Period or Growth Phase: 2002-07, Post Global

Financial Crisis Phase: 2008-12.) indicates more business per branch in the second

period except three banks (ICICI Bank, IndusInd Bank, Yes Bank) which show

Indian private sector banks resilient in global financial crisis period. On the basis of

mean of business per branch YES Bank, ICICI Bank, Axis Bank, HDFC Bank and

Indusind Bank are top five banks while Ratnakar Bank, Lakshmi Vilas Bank,

Catholic Syrian Bank, Dhanalakshmi Bank and Nainital Bank are lowest five banks.

The highest consistency (low value of coefficient of variation) in business per branch

productivity was found Development Credit Bank, Kotak Mahindra Bank, Indusind

Bank, Axis Bank and HDFC Bank while lowest consistency (high value of coefficient

of variation) was found in ICICI Bank, Lakshmi Vilas Bank, Nainital Bank, Ratnakar

Bank and Dhanalakshmi Bank.

All the private banks have experienced a rising trend in the deposit per branch



Crisis Period: 2008-12.) indicates more deposit per branch in the second period

except five banks which show Indian private sector banks resilient in global financial

crisis period. These five banks are Development Credit Bank, ICICI Bank, IndusInd

Bank, Kotak Mahindra Bank and Yes Bank. On the basis of mean of deposit per

branch YES Bank, ICICI Bank, Axis Bank, HDFC Bank and Indusind Bank are top

five banks while Lakshmi Vilas Bank, Catholic Syrian Bank, Dhanalakshmi Bank,

Nainital Bank and Ratnakar Bank are lowest five banks. The highest consistency (low

value of coefficient of variation) in deposit per employee productivity was found in

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Axis Bank, Development Credit Bank, HDFC Bank, ICICI Bank and Kotak Mahindra


Karur Vysya Bank, Catholic Syrian Bank, Tamilnad Mercantile Bank, Nainital Bank

and YES Bank.

All the private banks have experienced a rising trend in the advances per branch

productivity for the period 2002-12. The comparison of average advances per branch


Crisis Period: 2008-12.) indicates more advances per branch in the second period

except three banks (ICICI Bank, IndusInd Bank and Yes Bank) which show Indian

private sector banks resilient in global financial crisis period. On the basis of mean of

advances per branch YES Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank and

Indusind Bank are top five banks while Ratnakar Bank, Lakshmi Vilas Bank,

Catholic Syrian Bank, Dhanalakshmi Bank and Nainital Bank are lowest five banks

The highest consistency (low value of coefficient of variation) in advances per branch

productivity was found Kotak Mahindra Bank, Development Credit Bank, Indusind

Bank, Axis Bank and HDFC Bank while lowest consistency (high value of coefficient

of variation) was found in Lakshmi Vilas Bank, Tamilnad Mercantile Bank, Nainital

Bank, Ratnakar Bank and Dhanalakshmi Bank.

All the private banks have experienced a rising trend in the total income per branch

productivity for the period 2002-12. The comparison of average total income per


Financial Crisis Period: 2008-12.) indicates more total income per branch in the

second period except three banks (ICICI Bank, IndusInd Bank and Yes Bank) which

show Indian private sector banks resilient in global financial crisis period. On the

basis of mean of total income per branch YES Bank, ICICI Bank, Axis Bank,

Indusind Bank and Kotak Mahindra Bankare top five banks while South Indian Bank,

Lakshmi Vilas Bank, Catholic Syrian Bank, Dhanalakshmi Bank and Nainital Bank

are lowest five banks. The highest consistency (low value of coefficient of variation)

in total income per branch productivity was found Development Credit Bank, Yes

Bank, Kotak Mahindra Bank, Axis Bank and HDFC Bank while lowest consistency

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(high value of coefficient of variation) was found in City Union Bank, Nainital Bank,

Dhanalakshmi Bank, Ratnakar Bank and Dhanalakshmi Bank.

All the private banks have experienced a rising trend in the total expenses per branch

productivity for the period 2002-12. The comparison of average total expenses per

branch in the sub periods (Pre Global Financial Crisis Period: 2002-07, Post Crisis

Period: 2008-12.) indicates more total expenses per branch in the second period

except ICICI Bank which show Indian private sector banks resilient in global

financial crisis period. On the basis of mean of total expenses per branch South Indian

Bank, Lakshmi Vilas Bank, Catholic Syrian Bank, Dhanalakshmi Bank and Nainital

Bank are top five banks while YES Bank, ICICI Bank, Axis Bank, Kotak Mahindra

Bank and Indusind Bank are lowest five banks. The highest consistency (low value of

coefficient of variation) in total expenses per branch productivity was found Yes

Bank, Development Credit Bank, Indusind Bank, Axis Bank and HDFC Bank while

lowest consistency (high value of coefficient of variation) was found in City Union

Bank, Karur Vysya Bank, Lakshmi Vilas Bank, Dhanalakshmi Bank and Ratnakar

Bank.

All the private banks have experienced a rising trend in the spread per branch



Crisis Period: 2008-12.) indicates more spread per branch in the second period except

three banks (Ratnakar Bank, ICICI Bank and Yes Bank) which show Indian private

sector banks resilient in global financial crisis period. On the basis of mean of spread

per branch Kotak Mahindra Bank, YES Bank, ICICI Bank, Axis Bank, and HDFC

Bank are top five banks while Ratnakar Bank, Lakshmi Vilas Bank, Catholic Syrian

Bank, Dhanalakshmi Bank and Nainital Bank are lowest five banks. The highest

consistency (low value of coefficient of variation) in spread per branch productivity

was found Ratnakar Bank, Kotak Mahindra Bank, Development Credit Bank, HDFC

Bank, and Axis Bank while lowest consistency (high value of coefficient of variation)

was found in City Union Bank, Federal Bank, South Indian Bank, ING Vysya Bank,

and Lakshmi Vilas Bank.

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All the private banks have experienced a rising trend in the burden per branch



Crisis Period: 2008-12.) indicates more burden per branch in the second period except

three banks (Ratnakar Bank, ICICI Bank, Yes Bank) which show Indian banking

sector resilient in global financial crisis period. On the basis of mean of burden per

branch Karnataka Bank, Axis Bank, Indusind Bank, ICICI Bank and Ratnakar Bank

are top five banks while Kotak Mahindra Bank, HDFC Bank, Development Credit

Bank, YES Bank, ING Vysya Bank are lowest five banks. The highest consistency

(low value of coefficient of variation) in spread per branch productivity was found

Indusind Bank, ICICI Bank, Ratnakar Bank, Axis Bank and Nainital Bank while

lowest consistency (high value of coefficient of variation) was found in Federal Bank,

City Union Bank, Yes Bank, Karnataka Bank and Dhanalakshmi Bank.

In private sector banks the branch productivity of Axis Bank, HDFC Bank, YES

Bank, Indusind Bank and Kotak Mahindra Bank Ltd. were highest and consistent and

South Indian Bank, Nainital Bank, Lakshmi Vilas Bank, Ratnakar Bank,

Dhanalakshmi Bank were lowest during the study period. The new private sector

banks (seven Banks) branch productivity is higher than old private sector banks

(thirteen banks).

Finding Related To Branch Productivity of Foreign Banks

The main findings relating to branch productivity of foreign banks of the study are as

follow:

All the foreign banks have experienced a fluctuating trend in the profit per branch



Global Financial Crisis Period: 2008-12.) indicates more profit per branch in the

second period except three banks (Antwerp Diamond Bank, Barclays Bank and Royal

Bank of Scotland) which show foreign banks in India resilient in global financial

crisis period. On the basis of mean of profit per branch JP Morgan Chase Bank, Bank

of America, Deutsche Bank, Barclays Bank and Citibank are top five banks while

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United Overseas Bank, Oman International Bank, JSC VTB Bank, Commonwealth

Bank of Australia and FirstRand Bank are lowest five banks. The highest consistency

(low value of coefficient of variation) in profit per branch productivity was found

Oman International Bank, JSC VTB Bank, FirstRand Bank, Commonwealth Bank of

Australia and Mashreq Bank while lowest consistency (high value of coefficient of

variation) was found in Barclays Bank, Bank International Indonesia, Bank of

Bahrain & Kuwait, American Express Banking Co. and Chinatrust Commercial Bank.

All the foreign banks have experienced a rising trend in the business per branch


in the sub periods (Pre Global Financial Crisis Period or Growth Phase: 2002-07, Post

Global Financial Crisis Phase: 2008-12.) indicates more business per branch in the

second period except 6 banks (American Express Banking Co., Bank of America,

Bank of Nova Scotia, Mizuho Corporate Bank, Shinhan Bank and Standard Chartered


the basis of mean of business per branch JP Morgan Chase Bank, Deutsche Bank,

Bank of America, Citibank and HSBC are top five banks while JSC VTB Bank,

Mashreq Bank, Sonali Bank, Bank International Indonesia and United Overseas Bank

are lowest five banks. The highest consistency (low value of coefficient of variation)

in business per branch productivity was found United Overseas Bank, Bank of

Ceylon, Citibank, Bank of Bahrain & Kuwait and Royal Bank of Scotland while

lowest consistency (high value of coefficient of variation) was found in Bank of

Tokyo Mitsubishi UFJ, Bank International Indonesia, UBS AG, JP Morgan Chase

Bank and Barclays Bank.

All the foreign banks have experienced an increasing trend in the deposit per branch



Crisis Period: 2008-12.) indicates more deposit per branch in the second period

except 6 banks (Abu Dhabi Commercial Bank, American Express Banking Co., Bank

International Indonesia, Mashreq Bank, Oman International Bank and Sonali Bank)

which show foreign banks in India resilient in global financial crisis period. On the

basis of mean of deposit per branch JP Morgan Chase Bank, Citibank, DBS Bank,

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Deutsche Bank and HSBC are top five banks while Sonali Bank, Bank International

Indonesia, JSC VTB Bank, Commonwealth Bank of Australia and United Overseas


variation) in deposit per branch productivity was found United Overseas Bank, Bank

of Ceylon, Royal Bank of Scotland, Bank of Bahrain & Kuwait and Antwerp

Diamond Bank while lowest consistency (high value of coefficient of variation) was

found in DBS Bank, JP Morgan Chase Bank, Mashreq Bank, Bank International

Indonesia and Barclays Bank.

All the foreign banks have experienced an increasing trend in the advances per branch

productivity for the period 2002-12. The comparison of advances per branch in the


Period: 2008-12.) indicates more advances per branch in the second period except 6

banks (Abu Dhabi Commercial Bank, Bank International Indonesia, Bank of Ceylon,

Krung Thai Bank, Oman International Bank and Royal Bank of Scotland) which


mean of advances per branch JP Morgan Chase Bank, Citibank, Bank of Tokyo

Mitsubishi UFJ, Bank of America and Bank of Nova Scotia are top five banks while

Krung Thai Bank, Oman International Bank, Bank International Indonesia, Sonali

Bank and United Overseas Bank are lowest five banks. The highest consistency (low

value of coefficient of variation) in advances per branch productivity was found

United Overseas Bank, Citibank, Royal Bank of Scotland, Bank of America and Bank

of Ceylon while lowest consistency (high value of coefficient of variation) was found

in Barclays Bank, Oman International Bank, UBS AG, Bank International Indonesia

and JP Morgan Chase Bank.

All the foreign banks have experienced a rising trend in the total income per branch

productivity for the period 2002-12. The comparison of average total income per


Financial Crisis Period: 2008-12.) indicates more total income per branch in the

second period except three banks (Abu Dhabi Commercial Bank, Mashreq Bank and

Sonali Bank) which show foreign banks in India resilient in global financial crisis

period. On the basis of mean of total income per branch JP Morgan Chase Bank,

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Bank of America, Deutsche Bank, Barclays Bank and Citibank are top five banks

while United Overseas Bank, Krung Thai Bank, JSC VTB Bank, Bank International

Indonesia and Sonali Bank are lowest five banks. The highest consistency (low value

of coefficient of variation) in total income per branch productivity was found

Deutsche Bank, United Overseas Bank, Bank of Ceylon,Royal Bank of Scotland and

Sonali Bank while lowest consistency (high value of coefficient of variation) was

found in DBS Bank, Bank International Indonesia, UBS AG, Mizuho Corporate Bank

and JP Morgan Chase Bank.

All the foreign banks have experienced a fluctuating trend in the total expenses per

branch productivity for the period 2002-12. The comparison of average total expenses

per branch in the sub periods (Pre Global Financial Crisis Period: 2002-07, Post

Global Financial Crisis Period: 2008-12.) indicates more total expenses per branch in

the second period except six banks (Abu Dhabi Commercial Bank, Bank International

Indonesia, Bank of Bahrain & Kuwait, Bank of Ceylon, Sonali Bank and Oman

International Bank) which show foreign banks in India resilient in global financial

crisis period. On the basis of mean of total expenses per branch JSC VTB Bank AB

Bank, Krung Thai Bank, Bank International Indonesia, Sonali Bank and FirstRand

Bank (low expenses per branch) are top five banks while JP Morgan Chase Bank,

American Express Banking Co., Barclays Bank, UBS AG and Deutsche Bank are


total expenses per branch productivity was found United Overseas Bank, Bank of

Ceylon, FirstRand Bank, Commonwealth Bank of Australia and Bank of Bahrain &

Kuwait while lowest consistency (high value of coefficient of variation) was found in

Bank International Indonesia, JP Morgan Chase Bank, Barclays Bank, DBS Bank and

Mashreq Bank.

All the foreign banks have experienced a rising trend in the spread per branch



Crisis Period: 2008-12.) indicates more spread per branch in the second period except

three banks (American Express Banking Co., Bank International Indonesia and

Mashreq Bank) which show foreign banks in India resilient in global financial crisis

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period. On the basis of mean of spread per branch JP Morgan Chase Bank, UBS AG,

Citibank, Barclays Bank and Deutsche Bank are top five banks while AB Bank,

Mashreq Bank, Oman International Bank and Sonali Bank are lowest five banks. The

highest consistency (low value of coefficient of variation) in spread per branch

productivity was found AB Bank, United Overseas Bank, Royal Bank of Scotland,

Commonwealth Bank of Australia and Antwerp Diamond Bank while lowest

consistency (high value of coefficient of variation) was found in Barclays Bank, JP

Morgan Chase Bank, Mizuho Corporate Bank, Sonali Bank and Oman International

Bank.

All the foreign banks have experienced a fluctuating trend in the burden per branch

productivity for the period 2002-12. The comparison of average burden per branch in


Crisis Period: 2008-12.) indicates more burden per branch in the second period except

ten banks which show foreign banks in India resilient in global financial crisis period.

These ten banks are Antwerp Diamond Bank, Bank of Ceylon, Bank of Tokyo

Mitsubishi UFJ, Bank of Nova Scotia, HSBC, Oman International Bank, Bank

International Indonesia, Mizuho Corporate Bank, Sonali Bank and Standard

Chartered Bank. On the basis of mean of burden per branch Bank of Nova Scotia,

Credit Agricole Bank, Barclays Bank, Bank of America and JP Morgan Chase Bank

(low burden per branch) are top five banks while UBS AG, FirstRand Bank,

Commonwealth Bank of Australia, DBS Bank and Royal Bank of Scotland are lowest

five banks. The highest consistency (low value of coefficient of variation) in burden

per branch productivity was found State Bank of Mauritius, Bank International

Indonesia, Oman International Bank, Mizuho Corporate Bank and Barclays Bank

while lowest consistency (high value of coefficient of variation) was found in BNP

Paribas, American Express Banking Co., HSBC, Mashreq Bank and Antwerp

Diamond Bank.

In foreign banks on the basis of mean and coefficient of variation the branch

productivity (considering all eight indicators) of Citibank, Bank of America,

Deutsche Bank, Royal Bank of Scotland and Standard Chartered Bank were top five

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banks while UBS AG, JSC VTB Bank, Krung Thai Bank, Mashreq Bank, Bank

International Indonesia were lowest five banks.

FINDING RELATED TO EMPLOYEE PRODUCTIVITY OF INDIAN

SCHEDULED COMMERCIAL BANKS

The main findings relating to employee productivity of Indian scheduled commercial

banks of the study are as follow:

The profit per employee productivity was highest of Foreign Banks followed by

private sector banks and public sector banks. The decrease in concentration index

shows that the competition among the banks has increased. The lower dependence on

deposits as well as access to low cost deposits enabled foreign banks to register

higher profits than other bank groups in India.

The business per employee productivity was highest of Foreign Banks followed by

private sector banks and public sector banks. The private banks have highest business

per employee for eight years up to 2009 than public sector banks. The decrease in

concentration index shows that the competition among the banks has increased. The

foreign bank has highest business per employee because they are able to access

sufficiently low cost fund and able to deploy funds with higher returns. The Report on

the Committee on Financial Sector Assessment (CFSA), RBI in 2009 noted that „the

relatively higher productivity ratios of new PrSBs and FBs in terms of business per

employee could be due to increased mechanization, lower staff strength and increased

outsourcing activities as compared to PSBs. PSBs have a legacy of labour-intensive

work procedures and greater penetration in rural areas, which also result in

comparatively low business per employee.

The deposit per employee productivity was highest of foreign banks followed by

private sector banks and public sector banks. The private banks have highest deposit

per employee for seven years up to 2008 than public sector banks. The decrease in

index shows the increase in the competition between the banks regarding deposit per

employee.

The advance per employee productivity was highest of Foreign Banks followed by

private sector banks and public sector banks. The private banks have highest

advances per employee for eight years up to 2009 than public sector banks. The

287

decrease in index shows the increase in the competition between the banks regarding

advances per employee.

The total income per employee productivity was highest of Foreign Banks followed

by private sector banks and public sector banks. The decrease in index shows the

increase in the competition between the banks regarding total income per employee.

The total income per employee of foreign is higher because foreign banks have well

diversification of income.

The total expense per employee productivity was highest of Foreign Banks followed

by private sector banks and public sector banks. The private banks have highest total

expense per employee except in three years from 2006 to 2008 than public sector

banks. The decrease in index shows the increase in the competition between the banks

regarding total expense per employee. Foreign banks incurred relatively higher

expenditure than other bank groups for managing their assets. The possible reason for

these high operating expenses of Foreign banks because these banks generally spend

more for technology up-gradation, on costly real estate, salaries and also for

advertisement and publicity. Though this spending may impinge upon their profits in

the short run, it may yield a high dividend in the long run.

The spread per employee productivity was highest of Foreign Banks followed by

private sector banks and public sector banks. The decrease in index shows the

increase in the competition between the banks regarding spread per employee. FBs

gained on account of the higher difference between cost of funds and return on funds,

i.e., higher spread.

The private sector banks are on the top position regarding low burden per employee

then followed by foreign and public sector banks. The decrease in index shows the

increase in the competition between the banks regarding burden per employee.

The employee productivity (considering 8 indicators) of foreign banks is highest then

private and public sector banks. Thus, we found that even with the highest expenses

per employee, foreign banks report higher profit per employee than the other bank

groups (public and private). However, when we assess the other productivity

indicators, foreign banks are well placed than the other bank groups in India.

288

It might well be possible that foreign bank entry has both positive and negative

effects on domestic banks (public and private banks). On the positive side, technology

spillovers of new banking techniques and better management practices may lead

domestic banks to initially raise their costs in order to implement such practices.

However, over time, as such practices get imbibed in domestic banks; they are able to

proactively compete with their foreign counterparts. At the same time, with increased

competition arising out of foreign bank entry, there might be a switch of good-quality

customers to foreign banks, which, over time, would get reflected in a weakening of

loan portfolio of domestic banks. This would, in effect, necessitate higher loan loss

provisioning by domestic banks (i.e., higher costs).

FINDING RELATED TO BRANCH PRODUCTIVITY OF INDIAN

SCHEDULED COMMERCIAL BANKS

The main findings relating to branch productivity of Indian scheduled commercial

banks of the study are as follow:

The profit per branch productivity was highest of Foreign Banks followed by private

sector banks and public sector banks. The decrease in concentration index shows that

the competition among the banks has increased. The lower dependence on deposits as

well as access to low cost deposits enabled FBs to register higher profits than other

bank groups in India.

The business per branch productivity was highest of Foreign Banks followed by

private sector banks and public sector banks. The private banks have highest business

per branch than public sector banks. The decrease in concentration index shows that

the competition among the banks has increased. The foreign bank has highest

business per branch because they are able to access sufficiently low cost fund and

able to deploy funds with higher returns.

The deposit per branch productivity was highest of Foreign Banks followed by

private sector banks and public sector banks. The private banks have highest deposit

per branch than public sector banks. The decrease in index shows the increase in the

competition between the banks regarding deposit per branch.

The advance per branch productivity was highest of Foreign Banks followed by

private sector banks and public sector banks. The private banks have highest

289

advances per branch than public sector banks. The decrease in index shows the

increase in the competition between the banks regarding advances per branch.

The total income per branch productivity was highest of Foreign Banks followed by

private sector banks and public sector banks. The decrease in index shows the

increase in the competition between the banks regarding total income per branch. The

total income per branch of foreign is higher because foreign banks have well

diversification of income.

The total expense per branch productivity was highest of Foreign Banks followed by

private sector banks and public sector banks. The private banks have highest total

expense per branch than public sector banks. The decrease in index shows the

increase in the competition between the banks regarding total expense per branch. So,

on the basis of expenses per branch public sector banks are on the top position.

The spread per branch productivity was highest of Foreign Banks followed by private

sector banks and public sector banks. The decrease in index shows the increase in the

competition between the banks regarding spread per branch. FBs gained on account

of the higher difference between cost of funds and return on funds, i.e., higher spread.

The private sector banks are on the top position regarding low burden per branch then

followed by public sector banks and foreign banks. The decrease in index shows the

increase in the competition between the banks regarding burden per branch.

The branch productivity (considering eight indicators) of foreign banks is highest

then private and public sector banks. Thus, we found that even with the highest

expenses per branch, and highest burden per branch, foreign banks report higher

profit per branch than the other bank groups (public and private). However, when we

assess the other productivity indicators, foreign banks are well placed than the other

bank groups in India.

FINDING RELATED TO COMPARISON OF PRODUCTIVITY OF OLD

AND NEW PRIVATE SECTOR BANKS

The employee and branch productivity of new private sector banks is higher than old

private sector banks due to better assets liability management, better customer

relationship management and technology up-gradation.

290

FINDING RELATED TO PRODUCTIVITY OF INDIAN

COMMERCIAL BANKS IN PRE-GLOBAL FINANCIAL CRISIS AND

POST- GLOBAL FINANCIAL CRISIS

The analysis for two different sub-periods reveals that in spite of global financial

crisis, Indian banks continue to show increasing trends in productivity. However,

there is evidence of shrink in the market resulting in less productivity (labour and

branch) in post global financial crisis period in case of foreign banks.

FINDING RELATED TO DEVELOPMENT FINANCIAL INSTITUTION

A broad policy framework was outlined in the Mid-Term Review of Monetary and

Credit Policy of 1999-2000 of RBI and DFIs were given the option to transform into

a bank. The operational guidelines for enabling a DFI to convert to a universal bank

were issued in 2001. Government repealed IDBI act and converted IDBI Ltd. into a

banking company in September, 2004. The productivity of IDBI Ltd. was highest in

public sector banks.

FINDING RELATED TO BANK NETWORK

Geographical branch penetration score (37 branches per 1000 km2.) of SCBs in India

as on 31st March 2012 indicates that people have to travel considerable distance to

avail banking services in India. There has been considerable increase in bank branch

expansion in India, but, it is not in the proportion to increase in population in India.

FINDING RELATED TO PRODUCTIVITY ANALYSIS OF INDIAN

SCHEDULED COMMERCIAL BANKS: CAMEL MODEL

The main findings relating to productivity of Indian scheduled commercial banks of

the study are as follow:

The analysis shows that the CRAR is very high in case of foreign banks and raked

first. The next place is of private banks and it is lowest in public sector banks

among the three sectors. On the basis of advances to assets ratio private sector

banks was at the first position followed by public banks and foreign banks. On the

basis of group averages of sub-parameters of capital adequacy private banks were at

the top position followed by foreign banks and public banks stood at the last position

due to its poor performance in CRAR.

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In terms of assets quality the foreign banks was at the top position with group average

followed by private banks and public banks was positioned at last.

In context of management efficiency, foreign banks was at the top most position

followed by private banks and public banks positioned at last due to its poor

performance in three (TA/TD, PPE and BPE) sub parameters of management.

In terms of earning quality the foreign banks was at the top most position followed by

private banks and public banks positioned at last due to its poor performance in three

(OP/TA, NIM/TA and Return on assets) sub parameters of management.

In context of liquidity foreign banks was at the top most position followed by private

banks and public banks positioned at last due to its poor performance in two (Cash

deposit Ratio and Investment to deposit ratio) sub parameters liquidity.

Overall performance shows that foreign bank is ranked one followed by private banks

and public sector banks were at the bottom most position.

FINDING RELATED TO JOB SATISFACTION OF EMPLOYEES

The main findings relating to job satisfaction of employees are as follow:

Finding related to profile of respondents

Regarding profile of respondents, majority of them are males (79.2 per cent), female

being (20.8 per cent). It is found that 65.8 per cent of the respondents are married as

in comparison to only 34.2 per cent of unmarried respondent. 16.7 per cent of the

respondents fall in the age group of 18 to 25 years, followed by 52.5 per cent in the

age group of 25 to 35 years, whereas 1.7 per cent in the age group of 35 to 45 years

and 29.2 per cent in the age group of 45 years and above. 69.2 per cent of respondents

have the total service experience of 1-15 years. Further, the sample had maximum

representation from post- graduate (70 per cent), whereas there were 23.3 per cent of

graduate respondent. Further, 57.5 per cent of respondents were earning a monthly

salary of `32000-47000.

Finding related to Job Satisfaction

The factor analysis conducted on thirty six statements related to job satisfaction of

banks employees has yield thieteen factors. These factors explain 74.9 per cent of the

total variance. These factors are named as „Recognition by Top Management‟, „Job

Aspect‟, „Communication‟, „Nature of Job‟, „Role Clarity‟, „Performance Appraisal‟,

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„Job Security‟, „Education Qualification‟, „Training‟, „Competent to Work‟ and

„Remuneration‟. These factors have been extracted by using principal components

analysis and varimax rotation.

Finding related to comparison of private and public sector banks regarding Job

Satisfaction

There is significant difference between the employees of Public Sector and Private

Sector Banks regarding various aspects of Job satisfaction. Thus, null hypothesis is

rejected.

It is found that there is difference in the level of job satisfaction between public banks

and private banks regarding some factors like workload, employee empowerment,

supervision, salary offered to employees, performance appraisal, training and transfer

policy.

When it comes to remuneration, the employees in private banks are more satisfied

than the employees in public bank.

It is found that that the public sector banks employees are dissatisfied with the

transfer policy while private sector bank employees are satisfied with the transfer

policy.

It is found that shows that the public banks employees are more satisfied with the

performance appraisal as compared to private sector bank employees.

It is found that that the public sector banks employees are satisfied with the amount of

responsibility as compared to private sector banks employees.

It is found that the employees of PSBs are more satisfied with the aspects of

supervision than the employees of PVSBs.

FINDING RELATED TO JOB SATISFACTION AND PRODUCTIVITY

The old view that “A happy worker is a productive worker” does not clarify the

complex relationship between job satisfaction and productivity. High job satisfaction

leads to improved productivity, decreased turnover and less job stress. The private

sector banks productivity is higher than public sector banks. The job satisfaction is

also higher in private sector banks employees. So higher satisfaction leads to higher

productivity.

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5.3 SUGGESTIONS

The suggestions on the basis of the findings of the study are as follow:

SUGGESTIONS RELATING TO PUBLIC SECTORS BANKS

The suggestions related to public sector banks are as follow:

The public sector banks suffer from the dual control by RBI as well as government.

The government should make clear policy in what matter banks will follow

govertment and RBI.

The PSBs should gear up their appraisal systems in such a manner ensuring better

control over the defaulters.

The PSBs should bring operational efficiency and should diversify their activities into

non- traditional banking activities. They should concentrate on non-interest income

avenues. Diversification based on niches and core competences are more likely to be

successful. The strategy of offering the right kinds of product in the right market for

products rather than providing everything everywhere is important to achieve a

competitive advantage.

In order to raise productivity and profitability PSBs should spell turnover strategies,

income- oriented and cost-oriented strategies from time to time. Better management

information system, credit monitoring and cash management can result increaseing

productivity

The public sector banks must improve their credit lending policies so as to improve

asset quality and profitability.

In PSBs, low compensation is the biggest de-motivator for the efficient employees.

So it is suggested that the pay should be linked to individual performance, group

performance and overall business result of the bank.

The public sector banks should evolve strategies for handling the recovery of NPAs.

The private banks have comparatively greater freedom in terms of recruitment, salary

and compensation. If possible same design of human resource should be followed by

public sector banks.

The public sector banks require substantial capital to support growth. Reserve Bank

has made an estimate of the additional capital requirements of domestic banks for full

Basel III implementation till March 2018. These estimates are based on two broad

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assumptions: (i) increase in the risk weighted assets of twenty per cent p.a.; (ii)

internal accrual of the order of one per cent of risk weighted assets.

Banks should evolve a foolproof performance appraisal system covering the entire

spectrum of staff to obviate any feeling of discrimination and to instill confidence

among the employees.

The greater customer-orientation is the only way to retain customer loyalty and stay

ahead of competition. Public sector banks need to bring about total customer

orientation not only in their products/services but their policies and strategies should

also be customer focused.

The different committees related to public sector banks have enumerated a number of

problems relating to HRM in public sector banking such as over manning, low man

power productivity, indiscipline, restrictive practices, lack of management

commitment to training etc. Banks need to build a service culture using technology in

a customer friendly manner. This requires reorienting HRD strategies in public sector

banks on an urgent basis and banks need to emphasize right size, right skills and right

attitude.

SUGGESTIONS RELATED TO BRANCH PRODUCTIVITY

The suggestions related to branch productivity are as follow:

The banks should encourage customers to carry out transaction on digital channels

which lead to improved customer retention and higher balances in accounts.

To increase branch productivity the banks should allow and encourage customer to

use self –services machines like bulk note acceptors, passbook updation kiosk and

check deposit machines. This leads to reduce branch traction footfalls by 30-40%,

lower proportion of non-sales staff in the branches and customer can access the

machines 24x7.

For better branch productivity a new thinking on branch design is required. Branches

of the future would be modular, paperless, with no back office, and with on the spot

fulfillment.

The banks have huge opportunity to use information analytics for credit assessment

and early warning systems. Credit processes need to be re–engineered with

technology to reduce response time. Banks with slow credit process have high NPA

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since best customers get fed up and leave. Credit is a judgment decision and cannot

be abdicated to models. Capability and intuition of the credit cadre has to be

enhanced through teaming and apprenticeship. Use of gold as collateral for

agriculture lending could double the agriculture credit flow at very low NPA.

Customer services are create new challenges, to cope up with, technology will be the

key to reduce transaction costs, offering customized products and managing risks.

This is compelling banks to provide internet banking facilities and increasingly

customers are demanding fast, convenient and glitch free banking services.

SUGGESTIONS RELATING TO PRIVATE SECTORS BANKS

The suggestions related to private sector banks are as follow:

The old private sector banks should learn from new private sector banks. Their

productivity is higher than old private sector banks.

On the basis of my personal observation and interview of employees responsiveness,

empathy, tangibility of foreign banks was higher than private banks employees. So

private banks should consider it for better customer relationship.

SUGGESTIONS RELATING TO RELATING TO FOREIGN BANKS

The suggestions related to foreign banks are as follow:

The foreign banks have been operating in India as branches of the parent banks. The

domestic incorporation of foreign banks i.e. subsidiarisation is necessary.

The number of branches permitted each year to foreign banks has been higher than

the WTO commitments of twelve branches in a year. In addition, foreign banks in

India are free to undertake any banking activity (e.g., wholesale, retail, investment

banking, foreign exchange, etc.) which is allowed to domestic banks. In Singapore,

China and the US, strict restrictions have been imposed on the kind of businesses that

could be carried out by foreign banks within their jurisdictions. During 2003-07, India

allowed US-based banks to open nineteen branches (excluding the off-site ATMs).

But, in the same period, the US did not allow a single Indian bank to open a branch or

subsidiary or representative office in its territory despite many requests made by

public and private sector banks. Under the India-Singapore Comprehensive Economic

Cooperation Agreement (2005), the RBI allowed market access to three Singaporean

banks as per the agreement but the Monetary Authority of Singapore refused to fulfill

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its time-bound commitment for providing full bank license (Qualifying Full Bank

status) to three Indian banks. These are some of the important policy questions

relating to foreign banks.

The most of branches of foreign banks are located in metropolitan areas and major

Indian cities where bulk of premium banking business is concentrated. It is

distressing to note that foreign banks such as Standard Chartered Bank and BNP

Paribas have not yet opened a single branch in the rural areas despite operating in

India for more than 150 years. The foreign banks “cherry-pick” the most profitable

businesses and affluent customers residing in the metros and urban areas. The

contribution of foreign banks in the opening of “no frills” bank account under the

financial inclusion program has been abysmal, as documented in various RBI reports.

Raghuram Rajan, the new Governor of the Reserve Bank of India, announced that the

RBI will soon issue new rules allowing a more liberal entry of foreign banks in India.

These are some of the important policy questions which need to be addressed before

issue new rules for foreign banks.

Several banks (including HSBC, UBS, JPMorgan Chase and Credit Suisse) have

recently paid billions of dollars in fines for their alleged role in Libor rate-fixing

scandal, money laundering and other corrupt practices. Should India give such banks

a free run?

LEARNING FROM INTERNATIONAL EXPERIENCES: In South Korea, foreign

bank played an importantt role in building of short-term foreign borrowings which

induced financial fragility and risks in the Korean banking sector before and after the

2008 financial crisis. In Uganda, a rapid entry of foreign banks through acquisitions

and takeovers has led to a situation where rural areas remain under-banked and the

bulk of bank credit goes to trade. In many Latin American countries such as Brazil,

Mexico and Chile, there was a considerable decline in competition in the aftermath of

liberal entry of foreign banks. Finally, we should not forget that the Indian banking

system has remained resilent in global crisis period; thanks to a limited presence of

foreign banks, enlarged state ownership of the banking system, and a relatively strong

regulatory framework.

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SUGGESTIONS RELATING TO JOB SATISFACTION

The suggestions related to job satisfaction are as follow:

Job satisfaction of bank employees should be evaluated periodically for evolving

dynamic and pragmatic policies for organization's growth and development.

Private Sector Banks should pay attention to the extent of direction employees receive

from their boss since they are exhibiting lower level of satisfaction in this regard.

Public Sector Banks can influence the satisfaction of their employees by giving the

attractive incentive such as pay increments and rewards.

Training and development programmes must be designed in such a manner that the

employees are able to get regular update knowledge and skills.

The work given to be assigned to the employee according to their competencies.

5.4 RECOMMENDATIONS FOR FURTHER RESEARCH

I recommend the following areas where future research may be conducted:

On the basis of present study and literature review I found that there is no bench

marking regarding employee productivity and branch productivity to compare

performance of banks. In future, researcher can work on study benchmarking of

public, private and foreign banks.

In future, researcher may study impact of non performing assets (NPA) on employee

productivity and branch productivity.

In further, researcher may study impact of foreign banks entry on the performance of

domestic banks (public and private banks) regarding mode (Greenfield versus

takeover) and type (branch versus subsidiary) in India.

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Documents

CHAPTER-V FINDINGS AND SUGGESTIONSshodhganga.inflibnet.ac.in/bitstream/10603/38111/12/12_chapter 5.pdf · Bank of Travancore, Oriental Bank of Commerce and Vijaya Bank while lowest