PSBs outshine private foreign banks in efficiency during FY0623 SBI

According to a report by State Bank of India (SBI), public sector banks (PSBs) demonstrated higher efficiency than their private and foreign counterparts during the FY06-FY23 period. The average technical efficiency for the banking industry overall stood at 81.21%, implying a potential reduction in inputs by 18.79% for the same output level. \r

PSBs led with 82.76% efficiency, outperforming private banks at 79.59% and foreign banks at 78.15%. Despite challenges in the global and domestic economic landscape over the last decade, the Indian banking sector showed resilience. \r

SBI's Group chief economic advisor Soumya Kanti Ghosh highlighted that PSBs' performance, contrary to common belief, surpasses that of private and foreign banks. The report attributed this efficiency to government and RBI initiatives, although mergers impacted acquiring banks' productivity, especially evident among private banks like DCB Bank and IDFC First Bank during certain study periods.