ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Banking Efficiency and Banking Growth

hanks can be measured in many ways, Khusro and Siddharthan1 recently developed a measure of banking efficiency in terms of the elasticity of hank deposits with respect to advances, i e, the percentage increase in a bank's deposits consequent to a one per cent increase in the advances of the banking system as a whole. This measure had been applied to four commercial hanks in India. Raghavan and Khushi Ham* have more recently extended this application to another 11 commercial hanks and have further shown the linkage between banking efficiency and hanking growth. The present paper combines the theory of both works and demonstrates its applications in relation to all the 15 nationalised commercial banks.3 The data, however, are for the 18 years (1951-68) before nationalisation.

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