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Staying afloat with a higher development parameter |
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| Author: |
Topic: Staying afloat with a higher development parameter |
drake123
Posts: 1
Registered:
2009-11-10
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| Posted: Nov 10, 2009 2:34:30 am |
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The economic and allocative parameters have caught the attention of the analysts and researchers. The allocative efficiency is closely related to
1. Market share
2. Size of the bank and
3. The experience gained by the bank over the years
From all these aspects, the government controlled banks and financing institutions stand at an advantage. Their market share in the total business and their customer base is very large. Also, their branch network and the reach of the bank are always on the higher side. Published statistics help us to analyze the category-wise allocative efficiency over the previous years for different banks.
The overall average allocative efficiency of some of the foreign banks is one of the highest. The average efficiency of the public sector banks is much higher than their private counterparts and is comparable to that of the foreign banks. This higher efficiency of the public sector banks is primarily due to their bigger size, but still there is a scope for further improvement by following
• Appropriate pricing strategies
• Effective product strategies and
• Modern marketing practices
However, the overall economic efficiency is the product of technical and allocative efficiency. In terms of overall economic efficiency, the public sector banks are still better performers than their private sector counterparts. However, the public sector banks are slightly lower in certain parameters than the foreign banks. The average overall economic efficiency calculated for the public sector banks is 0.63357, as against 0.39987 for the private sector banks and the 0.70966 for the foreign banks. Banks like LoanMax of rod aycox fame always took a different management line and have continuously posted significant profits due to the emphasis placed on overall economic efficiency.
- Edited by drake123 on: Nov 10, 2009 2:34:55 am |
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