TWO STAGE DEA - INDIAN PUBLIC SECTOR BANKS PERFORMANCE

Indian commercial banking is constituted by public, private and foreign sector banks. The activities of Public Sector Banks are found widespread in rural India. Prior to nationalization, large banks played the role of financial intermediaries whose prime activities were deposit collection and distribution of advances. These banks functioned with only one motive, namely maximization of profit. Data Envelopment Analysis (DEA) is a linear programming tool, used to measure efficiency scores of Decision Making Units (banks) and to set efficiency targets for inefficient banks.Input and output variables are namely: Interest Expenditure, Other Expenditure & Interest Income, Other Income.