A Report

On

“Analysis of the Profitability and Efficiency of Different Branches of UCO Bank and Suggest Ways to Augment them”

By

Ashish Agarwal

Roll No-121115

Section A

Organisation: UCO Bank

Date of Joining: 3rd April, 2013

Faculty Mentor: Prof. Devesh Baid

INTRODUCTION

Banking has become a part and parcel of our life. One can’t imagine even a single day without

having to a transaction. Initially banks started off as a safe house where money can be stored and

guarded safely but now banks have other uses like giving out loans and credit facilities which is

very instrumental in driving the businesses of today. It is a major source of revenue for the bank.

Banks have also become instrumental in the upliftment of the economy of any country by fostering

investment and helping the country in the path of development. Globalization gave a new

dimension to the banking industry by increasing the number of players in the market it fostered

competition and forced banks to focus more on the customers’ satisfaction and improving the

operations to improve the profitability of the bank. Also one of the most important aspect to

measure the bank’s performance is to reduce cost of providing services to the customers and also

earn a non interest income which increases the profitability of the bank.

This study will focus on the parameters which are instrumental in determining the profitability of

the bank and we will also benchmark different branches of UCO Bank based on different models of

profitability and efficiency, identify the gaps in performance and find out ways to augment the

performance.

HISTORY OF BANKING IN INDIA

The start of banking can be traced back to the Vedic Period around 1750 B.C. Also in the Mauryan

dynasty there was an instrument called adesha was used which is corresponding to the bills of

exchange as we understand today.

Modern banking started with the establishment of the Bank of Hindustan in 1870. Later, three

presidency banks under Presidency Bank's act 1876 (Bank of Calcutta, Bank of Bombay and Bank

of Madras were set up) which laid foundation for modern banking in India. In 1921 all presidency

banks were amalgamated to form the Imperial Bank of India.

Reserve Bank of India Act was passed in 1934 & Reserve Bank of India (RBI) was constituted as

an apex body without major government ownership. Banking Regulations Act was passed in 1949.

This regulation brought RBI under government control. Under the act, RBI got wide ranging

powers for supervision & control of banks. In 1955, RBI acquired control of the Imperial Bank of

India, which was renamed as State Bank of India. In 1959, SBI took over control of eight private

banks floated in the erstwhile princely states, making them as its 100% subsidiaries. From 1960 till

1969 RBI reduced the total number of banks from 566 in 1951 to 85. Nationalisation of banks was

to make them play the role of catalytic agents for economic growth. The Narasimha Committee

report suggested wide ranging reforms for the banking sector in 1992 to introduce internationally

accepted banking practices. The amendment of Banking Regulation Act in 1993 saw the entry of

new private sector banks.

STRUCTURE OF INDIAN BANKING INDUSTRY

Banking Industry in India functions under the sunshade of Reserve Bank of India - the regulatory,

central bank. Banking Industry mainly consists of:

• Commercial Banks

• Co-operative Banks

The commercial banking structure in India consists of: Scheduled Commercial Banks Unscheduled

Bank. Scheduled commercial Banks constitute those banks which have been included in the Second

Schedule of Reserve Bank of India (RBI) Act, 1934.

For the purpose of assessment of performance of banks, the Reserve Bank of India categorise them

as public sector banks, old private sector banks, new private sector banks and foreign banks. The

figure shows the structure of Indian Banking Industry:

PART A: PROFILE OF THE ORGANIZATION

HISTORY OF THE ORGANIZATION

The idea of a truly Indian bank was first conceived of by Mr. G.D Birla, the doyen of Indian

Industrial renaissance, after the historic "Quit India" movement in 1942. Soon this nascent idea

came into reality and, on the 6th of January 1943, The United Commercial Bank Ltd. was born with

its Registered and Head Office at Kolkata. The very first Board of Directors was represented by

eminent personalities of the country drawn from all walks of life, and this all-India character of the

Bank has been assiduously maintained till date not only in the composition of its Board but also in

the geographical spread of its 2500 and more branches in the country as well as in its overseas

centres in Singapore and Hong Kong.

Having traversed periods of expansion and consolidation, the Bank was nationalized by the

Government of India on the 19th July 1969 whereupon 100 per cent ownership was taken over by

the government in UNITED COMMERCIAL BANK. This historic event brought about a sea-

change in the entire fabric of the bank's thinking and activities, commensurate with the

government's socio-political approach of mass banking as against class banking hitherto practised.

The Bank had gone for Rs.200 crore of IPO during the year 2003-04 and is now a listed Company.

As on 31.03.2012 Government Share-holding of the Bank was 65.19 per cent. Branch expansion

started at a fast pace, particularly in rural areas, and the bank achieved several unique distinctions in

Priority Sector lending and other social uplift activities. To keep pace with the developing scenario

and expansion of business, the Bank undertook an exercise in organizational restructuring in the

year 1972. This resulted into more functional specialization, decentralization of administration and

emphasis on development of personnel skill and attitude. Side by side, whole hearted commitment

into the government's poverty alleviation programmes continued and the convenorship of State

Level Bankers' Committee (SLBC) was entrusted on the Bank for Odisha and Himachal Pradesh in

1983.

The year 1985 opened a new chapter for the Bank as the name of the Bank changed to UCO BANK

by an Act of Parliament. The customer friendly and socially committed character, however,

remained even with this change in name which has, over the years, been regarded as one of the well

known and vibrant banks in the country. Today, with all its inner strengths, UCO Bank has come a

long way to symbolize friendliness for customers and efficiency in its banking business. Truly,

UCO Bank HONOURS YOUR TRUST.

BOARD OF DIRECTORS

 

Shri Arun KaulChairman & Managing Director

Shri N. R. BadrinarayananExecutive Director

Shri S.ChandrasekharanExecutive Director

Shri Pravin RawalDirector

Prof. Sebastian Luckose MorrisDirector

CA Manoj Kumar GuptaDirector

Shri B.P.VijayendraDirector

Shri D.N.ThakurDirector

Mr. Pratha ChandaDirector

SIZE OF THE ORGANIZATION

The total staff strength of the Bank as of 31st March, 2012 stood at 23,529 including 112 employees

serving overseas, 15 of which are expatriate officers. The total domestic staff strength of 23,147

comprises of 9059 officers, 9171 clerks and 4917 subordinate staff. (Source: UCO Bank, Annual

Report 2011-12).

As of March 2012 UCO Bank has 8 Circle Offices, 36 Zones and 2394 branches, which include

four overseas branches, two each in Singapore and Hong Kong. The Bank has strengthened its pan

India network by opening 188 operating branches in 2011-12, which takes the total figures to 2390

as of March, 2012. To have a better and focussed monitoring over the performance of the branches

the Bank had added one more zone, namely PUNE zone which takes the total no of zones of the

bank from 35 in March 2011 to 36 in March 2012. The population category wise classification of

domestic branches is given below:

The bank has a good network of specialized branches catering to the specialized or specific

requirements with specialized skills. The bank has designated 70 Personalized Banking Branches in

2011-12, taking the number to 287 in March, 2012. The bank has also put a serious effort to retail

business by opening 13 new Retail Loan Hubs during the year 2011-12 to increase the total number

39 as of March, 12. There has been 62 ultra-small branches launched, to enhance financial inclusion

in the unbanked regions, during the year 2011-12. Also the growth of alternative delivery channels

has also aided and enhanced the working of UCO Bank.

As on 31.03.2011

As on 31.03.2012

Growth in FY 2011-12

No of ATM's 608 864 256UCO Visa Debit Cards 13.31 lac 18.93 lac 5.62 lacCards Issued / month 42148 50819 8671e-Banking Users 76561 130497 53936

BUSINESS PROFILE

During the year 2011-12, the Bank showed a respectable growth in all the business parameters. Here are

some of the statistics which will show the performance of UCO Bank on a global basis. There are also charts

which show separately its performance in domestic markets as well as overseas.

GLOBAL FY 11 FY12 Growth in %Deposits 145278 154003 6.01Advances 100561 117504 16.85Total business 245839 271507 10.44

DOMESTIC FY 11 FY12 Growth in %

Deposits 136415 142017 4.11

Advances 93246 107840 15.65

Total business 229661 249857 8.79

OVERSEAS FY 11 FY12 Growth in %Deposits 8863 11986 35.24Advances 7315 9664 32.11Total business 16178 21650 33.82

As per the financial statement given in the website of UCO Bank we have the results of the global

business of UCO Bank as on 31st March 2013.

GLOBAL FY 12 FY13 Growth in %Deposits 154003 173431 12.62Advances 115540 128282 11.03Total business 269543 301713 11.94

Profitability Ratios

The following chart shows the profitability ratios of UCO Bank.

Financial Ratios Mar-11 Mar-12ROA in % 0.66 0.69Cost to Income Ratio in % 43.51 42.24Book value / share in INR 83.16 94.72EPS in INR 14.29 15.02NIM in % 3.07 2.77

Performance Indicators

Given below are some of the performance indicators which shows the performance of UCO Bank

for last five years.

Apart from all these UCO Bank has taken several initiatives to improve the banks CASA deposits

by launching different schemes like “UCO Suvidha” and attractive RD scheme like “UCO

Sowbhagya” to boost deposit volume.

The bank is also attaching utmost importance to the customer service and is continuosly reviewing

its business practices to provide the best banking facility to its customers. Transperency has been

maintained by hosting on the website a link for customer grievence redressal. UCO Bank has

brought down customer complaints to a very low level by prompt redressal.

VISION AND MISSION STATEMENT

Vision Statement: To emerge as the most trusted, admired and sought-after world class financial

institution and to be the most preferred destination for every customer and investor and a place of

pride for its employees.

Mission Statement: To be a Top-class Bank to achieve sustained growth of business and

profitability, fulfilling socio-economic obligations, excellence in customer service; through up

gradation of skills of staff and their effective participation making use of state-of-the-art

technology.

UCO Bank, with years of dedicated service to the Nation through active financial participation in all

segments of the economy - Agriculture, Industry, Trade & Commerce, Service Sector,

Infrastructure Sector etc., is keeping pace with the changing environment. With a countrywide

network of more than 2500 service units which includes specialised and computerised branches in

India and overseas, UCO Bank has marched into the 21st Century matched with dynamism and

growth.

SWOT ANALYSIS

UCO Bank is one of the many banks in the public sector and due to the emergence of private sector

banks there is a lot of competition in the market. To stay in the market an organization should

always conduct a SWOT analysis to see its standing with respect to other players in the industry.

The next figure demonstrates the SWOT analysis of UCO Bank and identifies the strengths,

weaknesses, opportunities and threats pertaining to UCO Bank in the current scenario.

Strengths Weaknesses1. Improved Net Interest Margin 1. Asset Quality2. Strong Distribution Network 2. Rising amount of NPA's 3. Low amount of advances 4. Large number of cost centres

Opportunities Threats1. Support of the Government 1. Changing Interest Rates and RBI Policy2. Opportunities through financial inclusion 2. Intense Competition3. Capital Flow Prospects to Developing Countries 3. Global Economic Imbalances

5 FORCES MODEL FOR INDIAN BANKING INDUSTRY

Although the strength of each force can vary from industry to industry, the forces, when considered

together, determine long-term profitability within the specific industrial sector. Collectively, the

five forces affect prices, necessary investment for competitiveness, market share, potential profits,

profit margins, and industry volume. The key to the success of an industry is analyzing the changing

dynamics between and within the five forces. Porter's model depends on the concept of power

within the relationships of the five forces.

Porters 5 force model can help us determine the factors involved and various market forces that

influence the functioning of the Bank business model. It helps in understanding the level of

competition the banking industry faces, competition is an important factor to determine the level of

profits the banking industry can achieve.

Porters Five Forces Model

Bargaining Power of Suppliers: The term 'suppliers' comprises all sources for inputs that are

needed in order to provide goods or services. The suppliers of capital might not pose a big threat,

but the threat of suppliers luring away human capital does. If a talented individual is working in a

smaller regional bank, there is the chance that person will be enticed away by bigger banks,

investment firms, etc.

Threat of New Entrants: New entrants do not pose a considerable threat to the banking industry

because of the high entry barriers which have been imposed. Some of the entry barriers are as

follows:

1. Government regulation: Licenses to new banks have been restricted by RBI which is

currently under revision which may allow new banks to enter but looking as of now there is

a lot of uncertainty in the market.

2. Large risks: Starting a bank is not a very easy task and it requires vast amount of capital

and also needs to face stiff competition from the previously established players. Also a long

incubation period is there to meet break even may also pose a threat and the firm starting a

bank should have a large liquidity to meet the short term liability.

3. Large Investments: Banking is a capital intensive industry and is very sensitive to world

economic conditions so seeing the present scenario starting a bank would be very risky

mainly due to the vast amount of initial capital outlay.

Power of Buyers: The individual doesn't pose much of a threat to the banking industry, but one

major factor affecting the power of buyers is relatively high switching costs. If a person has a

mortgage, car loan, credit card, checking account and mutual funds with one particular bank, it can

be extremely tough for that person to switch to another bank. Corporate clients have a very high

bargaining power just because of the volume of the transactions and money involved and so banks

lure in customers by offering better exchange rates, more services, and exposure to foreign capital

markets - work extremely hard to get high-margin corporate clients.

Availability of Substitutes: Some of the banking industry's largest threats of substitution are not

from rival banks but from non-financial competitors. The industry does not suffer any real threat of

substitutes as far as deposits or withdrawals; however insurances, mutual funds, and fixed income

securities are some of the many banking services that are also offered by non-banking companies.

There is also the threat of payment method substitutes and loans are relatively high for the industry. 

For example, big name electronics, jewellers, car dealers, and more tend to offer preferred financing

on "big ticket" items.  Often times these non-banking companies offer a lower interest rates on

payments then the consumer would otherwise get from a traditional bank loan.

Competitive Rivalry: The banking industry is highly competitive. The financial services industry

has been around for hundreds of years and just about everyone who needs banking services already

has them. Because of this, banks must attempt to lure clients away from competitor banks. They do

this by offering lower financing, preferred rates and investment services. The banking sector is in a

race to see who can offer both the best and fastest services, but this also causes banks to experience

a lower ROA. They then have an incentive to take on high-risk projects. In the long run, we're likely

to see more consolidation in the banking industry. Larger banks would prefer to take over or merge

with another bank rather than spend the money to market and advertise to people.

FUTURE STRATEGIES AND PLAN

The focus of UCO Bank will mainly be on retail banking. However, the bank will focus on recovery which is a major cost for the bank. The bank will also focus more on technology to make transactions more user friendly. Apart from that it will focus on generating innovative ways to increase the non interest income of the bank.

PART B- PROJECT WORK

INTRODUCTION

Nature of the Problem

Banks have long been in existence. It has been managing the money of the customers, giving them

returns and also have been providing financial support to households, businesses and government

alike and has been instrumental in the development of the economy of a nation as a whole. A nation

with strong banking policy and laws is resilient to all the economic downturn and business cycles

which may occur due to recessionary or inflationary cycles which are so prevalent in the economy

due to changes in the aggregate demand and supply in the global economic market.

There has been a lot of ways to measure the profitability of the bank as a whole. Some of the

common ways include evaluating the Return on Assets (ROA), Capital Adequacy Ratio (CAR),

Operating profit, Net Interest Margin. All these methods do measure the profitability of the bank as

a whole but there are some limitations of using these methods. For example, a bank that defers

marketing and new product development costs can appear to be performing well based on

accounting ratios even though these actions may impair future performance. Another limitation is

that accounting ratios aggregate many aspects of performance such as financing, marketing and

operations. A bank may appear to be performing well even if it is poorly managed on certain of

these dimensions, as long as it compensates by performing particularly well on other dimensions.

For management to identify and develop ways to improve branch performance, other bank

management tools that compensate for the weaknesses in accounting ratios are needed. Data

Envelopment Analysis (DEA) as one approach to help improve bank branch productivity.

Need To Improve Profitability and Efficiency

With the advent of globalization, competition from other banks and NBFC’s and volatile markets

have forced banks to look upon how to impart maximum value to the customers by incurring

minimum cost. The empowerments of the customers have also increased the need to improve the

performance otherwise they end up losing some valuable customers to their competitors. “What are

the drivers of performance?” is the prime question which is in the minds of the managers. This is

the first step to improve the performance of any bank. We need to identify the gaps in performance

and then fix them. Efficiency measurements, of course, imply an a priori knowledge of the inputs

and outputs of a bank. The need of the hour is to develop a competitive edge over other competitors,

banks in this case, in order to woo customers. It also enhances the brand image of the bank and also

enhances the market share of the bank with respect to the volume of transactions undertaken.

Objective of Study

1. To identify the inputs and the outputs that determines the bank performance.

2. Develop an operational performance measurement that enables banks (a) to avoid wasting

resources and to (b) identify the best practices at an individual branch level

3. Help banks to gain competitive advantage by suggesting methods to improve efficiency by

managing each Decision Making Units(DMU) in the case of banks it’s the branches.

METHODOLOGY

For identifying the gap between optimal performance and the current performance we are going to

use a technique known as data envelopment analysis (DEA) technique. The dimensions of

performance considered are internal service quality, operating efficiency, and profitability.

Approach-The DEA Framework

DEA is a linear programming-based technique for evaluating the performance of productive units. It

can handle multiple inputs and multiple outputs as opposed to the other techniques such as ratio

analysis or regression. The ratio analysis technique suffers from a drawback that different ratios

may indicate the performance of a unit ambiguously in different directions. The regression analysis

technique does not suffer from this drawback. However, it assumes a priori a form of functional

relationship between inputs and outputs, and it can handle only one output at a time (Manandhar &

Tang, 2001).

From a given set of branches, the DEA technique constructs an empirical production frontier

defined by relatively efficient branches. For example, let us say 5 branches use different mix of two

inputs: I1and I2 to produce one unit of output in each case. The branches A, B, and C, which are

relatively efficient in the use of inputs, define the production frontier. The efficiency of a branch is

evaluated as a radial distance from the frontier. For example, the ratio of OF to OE represent the

efficiency of branch E. It is the potential proportionate reduction in the inputs of the branch to make

it efficient.

The following linear programming formulation (Model A) is used for evaluating the efficiency ZE

of any branch E in a set of n branches (Charnes, Cooper, & Rhodes, 1978).

Minimize ZE such that;

Where yrj is observed at the rth output and xij is observed at the ith input of branch j. The inputs and

the outputs are specified according to a desired context of performance such as operating efficiency,

profitability etc. The performance dimensions need to be defined by us as the inputs provided and

the outputs generated for different branches based on the appropriate context are it operating

efficiency or profitability etc.

The model contains a set of inputs or resources provided and the set of outputs are measured which

is then used to measure the efficiency. The inputs identified by management were labor, office

space and supply costs. All inputs were directly associated with each branch and no allocations of

head office costs were included. Labour was comprised of a measure of full-time equivalent

personnel per branch (FTE's). This includes tellers, customer service representatives and branch

management. Office space was identified as space used by each branch (in square feet). Output

referred to amount of transactions done by the bank in that quarter in terms of advances and fixed

deposits undertaken and no of accounts opened during the period.

Note: Many of these data are confidential and hence will not be shown in this report.

Sources of Data

The data that we have collected is of 2012-13 and the data has been collected as a secondary data.

For this analysis we are taking five different branches of UCO Bank. The branches are selected

based on convenience. The type of sampling is called convenience sampling. The number of

branches is selected based on convenience due to the nature of data involved and the ease with

which the data could be retrieved.

Model Inputs

The model inputs that is being considered to measure the efficiency and profitability of each branch

are:

1. No of managerial personnel

2. No of clerical personnel

3. No of computer terminals

4. Area of the branch in sq. feet

5. Expenditure in lighting and stationery

6. Expenditure in salary of the employees.

Effort of the managerial and clerical personnel has been measured in number of hours with average

daily effort being assumed to be 8 hours.

Model Outputs

The output which has been used to measure the performance and profitability are:

1. Volume of deposits.

2. Volume of advances

3. Commission earned by the bank for undertaking the transaction.

ANALYSIS AND DISCUSSIONS

The software that has been used to do the analysis is named as ‘DEAP’. This software takes into

account all the inputs and the outputs generated to find out the technical efficiency of the business

process. The software uses three different option but the CRS model has been used to calculate the

efficiency of the branches. The method is oriented in input and output orientation. The input

orientation identifies the slacks in input with a given level of outputs. If the firm uses quantities of

inputs defined by point P, to produce a unit of output, the technical inefficiency will be shown by

the distance PQ(shown in the figure below), which is the amount by which a firm can reduce the

inputs without reduction in the output. The technical efficiency is measured by the ratio:

TE= 0Q/0P

A value of 1 will denote that the firm is fully technically efficient.

Results

After using the data and running the CRS model using the software the TE of all the branches were

calculated. Here are the results of the software:

We see from this result that branch 1, 3 and 4 are technically efficient and which forms a

benchmark based on which we can estimate the technical inefficiency of the remaining branches in

terms of input. Based on the TI value we can conclude that branch 2 can reduce its input by a

whopping 46.1% without having any effect on the outputs. We also see that branch 5 can reduce its

inputs by 14.4% without having any effects on its current output.

Branch λ1 λ2 λ3 λ4 λ5B2 0.169 0.343 B5 0.856

BranchTechnical Efficiency

B1 1B2 0.539B3 1B4 1B5 0.856

The branch 2 and 5 are inefficient and to make it match to the efficient frontier which represents the

optimal level of input output combination we need the lambda values. For branch 2 we have for its

peers as branch 1 and branch 4 as when it is projected to the efficient frontier its lies on the line

joining branch 1 and 4(the reason why we call them peers). The point 2 is the linear combination of

point 1 and 4 and weights of that combination are given by the lambda values. Since the number of

inputs and outputs are large to draw a graph and denote the values will be infeasible which could

have been easily done for 2 inputs and 1 output.

Slack Analysis

Output SlacksBranch Amt of commission earned Volume of deposits Volume of AdvancesB1 0 0 0B2 0 55,932,461.18 0B3 0 0 0B4 0 0 0B5 86,463.111 0 35,484,815.99

Input Slacks

BranchNo of managerial personnel

No of clerical personnel

No of computer terminals Area

Stationery & Light Exp Salary Exp

B1 0 0 0 0 0 0B2 2.025 1.125 0 126.022 30,475.016 1,607,833.674B3 0 0 0 0 0 0B4 0 0 0 0 0 0B5 0 0 0 256.713 88,123.442 164,426.98

Based on the values of input and output slacks we can determine what needs to be done to optimize

the performance of the branch in concerned. There are some points to be noted:

We see that the branches which are performing in efficiently have a slack value whereas other

branches which are efficient have 0 as the slack. Now we need to understand what we mean by

slack. A slack represent only the leftover portions of inefficiencies; after proportional reductions in

inputs or outputs, if a Decision Making Unit (DMU) cannot reach the efficiency frontier (to its

efficient target), slacks are needed to push the DMU to the frontier (target). Each branch is a DMU.

It means that the reduction/increase in that quantity (in case of input slack increase in the same

quantity in case of output slack) will help in attaining the efficient performance by the DMU or the

branch in question.

Analysis and Recommendation for Branch 2

Present condition

The branch is working under 53% efficiency and need to increase its efficiency by almost 47%

some serious measures need to be taken. Now looking at the slack values we see that branch 2

should reduce the effort of managerial personnel and clerical personnel by 2 and 1 hour a day also it

should increase the utilization of the bank more efficiently. It also needs to cut its cost of stationery

and lighting by 30000 INR approximately and reduce expenses in salary of staff by 16 lacs which

means it must transfer some employees from branch 2 to some other branch in which he could be

productively used as idle time of the employees is a loss and additional expense to the organisation.

In spite of doing that it also needs to increase its deposits by a whopping 5 crore to reach the

maximum level of technical efficiency.

Recommendations

1. Increase the amount of customer and the amount of deposits by effective marketing of the

branch and increasing its customer base. It may hire a marketing person who can do that or

maybe assign the additional responsibility to an employee already working.

2. It needs to effectively save on electricity expenses by proper organisation which may reduce

the consumption of electricity without affecting the minimum lighting requirements of the

employees.

3. It may also reduce one clerical personnel and transfer the person to some different branch

where the no of customers coming to branch is more.

Analysis and Recommendation for branch 5

Present condition

The branch is currently working under 85% efficiency and needs to increase its efficiency by only

15% to become 100% efficient branch. Now looking at the slack values of the branch we find out

that the branch is not making optimal use of the area which it occupies. It may be due to the placing

of the counters and needs to work on that. Another way of increasing the utilization of area is to add

a new counter which may increase the commission earned as the counter may provide some

innovative services which would increase the commission as well as add value to the customer. It

may also increase the amount of advances which is short by 3.5 crores and also increase the amount

of commission earned by around 90000 to become fully efficient.

Recommendations

1. Improve the organisation of the branch by effectively placing the counters to facilitate

maximum use of the area and minimize the electricity costs.

2. Provide some innovative services in the branch like say for example aid in filing tax returns

and other services and earn some commission on that which would increase the customer

satisfaction and may also help in increasing the amount of advances by wooing customers

with their superior service quality.

Conclusion

Thus we see that DEA analysis is very instrumental in determining the gap in efficiency of the

organisation and by using it we can not only identify the gaps but also it provides some insight into

how to fill those gaps. The managerial implications regarding these gaps is that it provides an in

depth insight as to what is wrong. It helps us identify the managerial problems which may not be

visible directly. There may be misconceptions that a branch is performing well by seeing the

outputs but we need to also see the inputs and also benchmark these inputs and outputs of other

branches so as to find out the real scenario.

Limitations of the Study

Every study has its bottlenecks and this is no exception. Some of the potential bottlenecks of this

study are:

1. Scope of the study: The scope of the study was only 5 branches in Ahmadabad which is a

very limited. The more the number of branches studied the more effective will be the

frontier generated and which will lead to a better analysis and more accurate results.

2. Input Parameters: The input parameters have their own limitations. I have taken 6 inputs

for this study but more inputs can be taken into account and based on that a more detailed

analysis can be conducted and some hidden insights can be gained.

3. Output Parameters: The output parameters have their own limitations. This study

incorporates 3 output parameters which are among the very few ways in which output of the

banks can be quantified. Some more output parameters would give us more insight into the

efficiency of the banks.

PART C- LEARNINGS FROM THE SUMMER TRAINING

PROJECT .

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