Impact Of IT On Indian Commercial Banking Industry: DEA Analysis

Abstract

In recent time, Indian banking industry has been consistently working towards the development of technological changes and its usage in the banking operations for the improvement of their efficiency. To get the benefits of enhanced technologies, Indian banks are continuously encouraging the investment in information technology (IT), i.e. ATMs, e-banking or netbanking, mobile and tele-banking, CRM, computerisation in the banks, increasing use of plastic money, establishment of call centers, etc. RBI has also adopted IT in endorsing the payment system’s functionality and modernization on an ongoing basis by the development of Electronic Clearing Services (ECS), Electronic Funds Transfer (EFT), Indian Financial Network (INFINET), a Real-Time Gross Settlement (RTGS) System, Centralized Funds Management System (CFMS), Negotiated Dealing System (NDS), Electronic Payment Systems with the ‘Vision Document’, the Structured Financial Messaging System (SFMS) and India Card – a domestic card initiative, implemented recently (2011). Therefore, Indian banking environment has become more compatible as compare to the standards of international financial system, by the positive impact of all these efforts. This study makes an attempt to map the impact of IT on banking  sector for scheduled commercial banks operating in India including public, private and foreign sector banks in India. The study uses a nonparametric linear programming based technique. The results convey that all SCBs have shown a significant and improving trend in their performance due to the adoption of IT. This adoption is required mandatory to take the country into the 21st century.