COVID-19 crisis and the efficiency of Indian banks: Have they weathered the storm?

The purpose of this study is to determine whether Indian banks were able to weather the COVID-19 storm. We estimate banks' deposits-generating and operating efficiencies using a two-stage directional distance functionbased network data envelopment analysis (DDF-NDEA) approach and seek to capture the immediate impact of COVID-19 on these efficiency measures by comparing their magnitudes in the pre-pandemic (2014/15-2019/ 20), just 1-year prior to the pandemic (2019/20), and during the pandemic year (2020/21) periods. The study looks at whether the impact of the COVID-19 pandemic was uniform across ownership types and size classes. The empirical findings suggest that the Indian banking system was resilient and withstood the immediate impact of the COVID-19 pandemic. During the study period, however, the large and medium-sized banks experienced some efficiency losses. By and large, regardless of bank group, banks have shown resilience to the shock of the global health pandemic and improvements in efficiency.

Automated summary

The study aims to determine the resilience of Indian banks to the COVID-19 pandemic. Using a two-stage directional distance function-based network data envelopment analysis (DDF-NDEA) approach, the study examines the banks' deposits-generating and operating efficiencies and compares them before, during, and after the pandemic. The findings suggest that the Indian banking system showed resilience to the immediate impact of COVID-19, although large and medium-sized banks experienced some efficiency losses. Overall, banks, regardless of ownership and size, demonstrated resilience and improved efficiency in response to the global health crisis.