Performance evaluation of district central co-operative banks in India: A data envelopment analysis

Abstract

Cooperative banks play an important role in the Indian banking system. In this paper, Data Envelopment Analysis (DEA) model is applied to evaluate the efficiency of District Central Cooperative Banks (DCCB) in India. DEA is a mathematical modeling technique used to evaluate the relative efficiency of Decision making units (DMUs). We considered each DCCB as a Decision making unit. Nineteen DCCB functioning in India are taken into an account for the analysis. Banker Charnes Cooper (BCC) Output - oriented model allowing variable returns to scale (VRS) is applied. It is found that Karnataka DCCB is inefficient compared to its peers. The projection analysis is carried out for this DMU and it reveals that it has to make improvement into output.