LITARTURE REVIEW Roma Mitra, Shankar Ravi (2008), A stable and efficient banking sector is an essential precondition to increase

the economic level of a country. This paper tries to model and evaluate the efficiency of 50 Indian banks. The Inefficiency can be analyzed and quantified for every evaluated unit. The aim of this paper is to estimate and compare efficiency of the banking sector in India. The analysis is supposed to verify or reject the hypothesis fulfils its intermediation function sufficiently to compete hether the banking sector hich ith the global players. The results are

insightful to the financial policy planner as it identifies priority areas for different banks!

can improve the performance. This paper evaluates the performance of "anking #ectors in India. B.Satish !mar (2008), in his article on an evaluation of the financial performance of Indian rote $rivate sector banks play an important role in development of Indian banks to be started in the generation

private sector banks

economy. After liberalization the banking industry under ent major changes. The economic reforms totally have changed the banking sector. %"I permitted ne as dominated by public sector banks. "ut no banks the banking industry. Bri"#sh . Saho, Anan$##% Sin&h (200'), this paper attempts to e'amine! the performance ays. 1irst! the increasing average annual trends in technical private sector as per the recommendation of &arashiman committee. The Indian banking industry the situations have changed ne ith used of technology and professional management has gained a reasonable position in

trends of the Indian commercial banks for the period( )**+,*- , .00/,05. 0ur broad empirical findings are indicative in many efficiency for all o nership groups indicate an affirmative gesture about the effect of the reform process on the performance of the Indian banking sector. #econd! the higher cost efficiency accrual of private banks over nationalized banks indicate that nationalized banks! though old! do not reflect their learning e'perience in their cost minimizing behavior due to 2,inefficiency factors arising from government o nership. This finding also highlights the possible stronger disciplining role played by the capital market indicating a strong link bet een market for corporate control and efficiency of private enterprise assumed by property right hypothesis. And! finally! concerning the scale elasticity behavior! the technology and market,based results differ

significantly supporting the empirical distinction bet een returns to scale and economies of scale! often used interchangeably in theliterature. Vra$i, Vi"a(, Ma!)!ri, *a&ar"!na (200+), in his study on3 4easurement of efficiency of bank in India concluded that in modern orld performance of banking is more important to stable the e have see the fore indicators i.e. economy .in order to see the efficiency of Indian banks

profitability! productivity! assets! quality and financial management for all banks includes public sector! private sector banks in India for the period .000 and )*** to .00.,.005. 1or measuring efficiency of banks e have adopted development envelopment analysis and found that public sectors banks are more efficient then other banks in India ,#t(a o#va (-!)( 200.), in his study on The $erformance of Indian "anks. 6uring 1inancial empirical evidence on the impact of financial liberalization on the

7iberalization states that ne

performance of Indian commercial banks. The analysis focuses on e'amining the behavior and determinants of bank intermediation costs and profitability during the liberalization period. The empirical results suggest that o nership type has a significant effect on some performance indicators and that the observed increase in competition during financial liberalization has been associated ith lo er intermediation costs and profitability of the Indian banks. /han!sko$i (200'8 studied that banks play a very important role in the economic development of every country. They have control over a large part of the supply of money hich is in circulation. "anks are the main stimulus of the economic progress of a country. In general there are several challenges confronting of commercial banks. The main challenge confronting the commercial bank is the disbursement of funds in quality assets 9loans and advances8! the research has attempted to study the &on,$erforming Assets 9&$As8 in :ommercial "anks. In a prior study "arr et al. 9)**/8 suggested that failing banks had often sho ed a level of bad loans. It has been indicated that such ailing banks are in no ay near the best practice frontier. In fact a negative impact of bad loans on the efficiencies of the banks has been affected. Increase in non, performing loans tends to be follo ed by decrease in cost efficiency! suggesting an increase in monitoring e'penses of banks.

R#$$( (20028 in his study focuses on comparative study of &on,$erforming Assets in India in the ;lobal conte't , similarities and dissimilarities! remedial measures and concluded the importance of a sound understanding of the macroeconomic variables and systemic issues pertaining to banks and the economy for solving the &$A problem along ith the criticality of a hich is that strong legal frame ork and legislative frame ork. 1oreign e'periences must be utilized along ith a clear understanding of the local conditions to create a tailor made solution transparent and fair to all stakeholders. <aur and $asricha 9.00/8 concluded a research on management of &$As in $ublic sector banks over a - years period ending .00. and sho gross &$A has registered a constant increase from )**5,.00.. -a)an (2000) stated that there are some internal factors leading to &$As! the onus rests ith the

banks themselves. This calls for organizational restructuring! improvement in managerial efficiency! skill up gradation for proper assessment of credit orthiness and a change in the attitude of the banks to ards legal action hich is traditionally vie ed as a measure of the last resort. These are the elements on the agenda of the second phase of reforms. 4uniappan 9.00.8 reported that the high level of &$As in banks and financial institutions has been a matter of grave concern to the public as bank credit is the catalyst to the economic gro th of the country and any bottleneck in the smooth flo of credit! can cause for mounting &$As! and can create adverse consequences in the economy. <undu 9n.d8 stated that banking sector reforms in India has progressed promptly on aspects like interest rate deregulation! reduction in statutory reserve requirements! prudential norms for interest rates! asset classification! income recognition and provisioning. "ut it could not able to match up 9.00/8 stated that the Indian banking sector ith the pace hich as e'pected from it. "haumik =olume,I! &o.,5! >anuary ,, >une .0). "usiness #pectrum I##&,../*,/-0/ and $iesse itnessed more reforms than most other sectors of the Indian economy during the decades of )**0s. Interest rates have been deregulated! and entry into the banking sector has been liberalized. #imilarly %eddy 9.00.8 researched that financial sector reform in India and suggested that changes ere required to tackle the &$A problem. Va))a1h (200'8 e'plores an empirical approach to the analysis of &on,$erforming Assets 9&$As8 of public! private! and foreign sector banks in India. A model consisting of t o types of

factors! viz.! macroeconomic factors and bank,specific parameters! is developed and the behavior of &$As of the three categories of banks is observed. :haudhuri 9.0058 stated that the ?&$As indicate asset quality of the balance sheet of a bank@institution and hence future income generating prospects. It also requires provisioning hich has implications ith respect to capital adequacy. 6eclining capital adequacy adversely affects shareholder value and restricts the ability of the bank@institution to access the capital market for additional equity to enhance capital adequacy. Thus! if a resolution strategy for recovery of dues from &$As is not put in place quickly and efficiently! these assets ould deteriorate in value over time and little value ould be realized at the end! e'cept may be its scrap valueA. %amakumar 9.00+8 focused on the &$As hich can be recovered through legal and regulatory recourses and is critical to the sustainability of banks. Thus! he suggested that to revise the various legislations and regulations that address the recovery of &$As and evaluates their impact on recovery performance of banks. San"##v (200'8 attempted to identify the critical factors! hich are responsible for the loans to

go bad in the Indian commercial banking system. The study uses primary data collected from credit managers of banks operating in India. The study revealed that the e'ternal factors have a higher influence compared to the internal factors