Performance Evaluation of Commercial Banks in India

PERFORMANCE EVALUATION OF COMMERCIAL BANKS IN INDIA

(With Special Reference to Selected Public, Private and Foreign Banks)

Introduction

Banking constitutes an important sector of an active financial system of a country. The

banking sector provides a strong basis on which the structure of a modern financial system of a

country stands. The developments of banking have a profound effect on the growth of a country.

Enhancing Profitability, Maintaining Liquidity and improving Growth performance of

Commercial banks have key objectives of economic reforms in India and as well as other

countries.

A compact and well-functioning financial sector is a dynamic machine behind the

economic development in a country. In the financial sector, commercial banks play a very

dynamic role by mobilizing the savings and allocating them towards economic development.

Through in global frame work, Indian banking is an advantageous position on account of having

a wide network throughout the country.

In India, Commercial Banking holds an important segment of the tertiary sector. It acts as

the backbone of our economic progress and prosperity. It plays a pervasive role in the

development channel. Indian banking sector has under gone major transformation during the past

three decades and has made more socially relevant and development oriented. The Financial

Sector reforms also include increase in the number of banks due to the entry of new private and

foreign banks, increase in the transparency of the banks’ balance sheets through the introduction

of prudential norms and increase in the role of the market forces due to the deregulated interest

rates. These have significantly affected the operational environment of the Indian banking sector.

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Today, the Indian commercial bank management is facing two-faced challenge- to not

only to improve their profitability but also serve to the public in a right way. It can be meant that

greater efficiency and effectiveness in the noble task of fulfilling the socio-economic

responsibilities