Evaluating the efficiency of regional rural banks across the Indian states during different phases of structural development

The study aims to evaluate the efficiency of regional rural banks (RRBs) across 26 major states in India during different phases of structural development (merger & acquisitions) in the post-reform period of last 15 years spanning from 2001 to 2015. The technique of data envelopment analysis (DEA) is used to evaluate the efficiency of RRBs in each state during three sub-periods to observe the effect of mergers. In-depth analysis is conducted to test the robustness of efficiency scores and evaluate the potential improvement of defined inputs and outputs of inefficient states. The finding reveals wide variations in efficiency across the states in each sub-period. On an average, there is a remarkable improvement in technical efficiency (TE) over three sub-periods resulting through the gain in both pure efficiency (PE) as well as scale efficiency (SE) and thus providing evidence of the positive impact of mergers & acquisitions in different phases of structural development.