Efficiency and Profitability of State Bank of India and its Associate Banks in India

Abstract

Financial Soundness and profitability of the banking sector in India has implicit primeval importance due to intense competition, and changing banking reforms. The quality in the working of financial sector truly impacts the profitability of the banks which as a whole impacts the economy and GDP of a country. This study attempts to measure the relative performance of State Bank of India and Its Associate Banks in India. For this study, we have used the State Bank of India and its five associate banks. We know that in the service sector, it is difficult to quantify the output because it is intangible. Hence different proxy indicators are used for measuring productivity of banks. The profitability of the banks are examined on the basis of the following parameters: Return on Assets, Return on Equity ,Net Non Performing Assets, Interest Income to Total Assets, Net Interest Margin, Establishment expenses, Capital to Risk  Assets Quality ratio. Here an attempt has been made to examine the financial soundness of SBI & its Associate banks in terms of efficiency and profitability.