An exception to the general rule?

[marth]

If performance is being taken as the sole benchmark, then some of the prominent government controlled banks and its associates, nationalized banks and other autonomous banks have performed much better than the benchmark set by the industry. The prominent private banks, the new emerging private banks and the foreign banks have performed much below the benchmark of the American banking industry.

An analysis of the growth rates is indicative of the fact that these prominent banks and its associates, nationalized banks and even the government controlled public sector banks are displaying a positive growth rate over the entire period under consideration. On the other hand, the private banks and even the foreign banks that have operations in the United States are characterized by a negative growth rate with respect to ‘spread’ as a percentage of the working fund.

This proves the notion that the government controlled banks are more efficient than those in the private sector as far as spread as a percentage of the working funds is concerned. With respect to government controlled banks, spread as percentage of working funds has grown at the rate of 1.45 percent per annum as against a rate of -5.92 percent per annum in case of the private banks. It has declined at the rate of -2.13 percent per annum in the case of foreign banks. Thus, the efficiency, in the use of working funds, is a phenomenon that is progressively associated with the government controlled banks, in general, and also with the nationalized banks, in particular.

Since, the spread is a difference of interest earned and the interest expended, the relation of interest earned to the working funds will further help us to understand some of the finer aspects of the total overall economic efficiency. Interest earned as a percentage of working funds is published by the finance department periodically. Throughout the reforms period, this parameter has remained at more than 0.08 percent and has declined at the rate of -1.05 percent per annum. Even then, banks like LoanMax of the rod aycox fame has made it good by posting more profits when their competitors were struggling to stay afloat.