PSU banks outsmart private, foreign lenders in technical efficiency, shows SBI report

According to a report by the State Bank of India, state-run banks have demonstrated superior efficiency compared to private and foreign lenders over the last two decades. From 2005-06 to 2022-23, the average technical efficiency of the banking sector stood at 81.21 percent. \r

Public sector banks (PSBs) led with 82.76 percent efficiency, while private banks operated at 79.59 percent and foreign banks at 78.15 percent. Despite challenges, including mergers impacting acquiring banks' productivity, PSBs consistently outperformed private banks except in the FY19 to FY23 period. \r

The report highlighted successful efforts by the government and RBI in enhancing banking sector efficiency. SBI particularly stood out as consistently efficient across all study periods analyzed.