English Abstract
Abstract:
This study aims to determine the impact of banking efficiency on the profitability of the
Indian banking division. The ratios (key variables) used in the study are mentioned by the Reserve
Bank of India—RBI (Central bank of India). Through a quantitative approach, pooled panel regression,
univariate analysis, correlation, and descriptive statistics models are used by taking annual data of
the Indian banking division from 2001 to 2020 available on the Thomson Reuters (Refinitiv) Database.
Unbalanced cross-sectional data (panel data) comprising 527 bank-year observations for 33 Indian
banks were studied. It was decided to evaluate the impact of efficiency (cost to income ratio and staff
expenses to total expenses ratio) on the profitability (return on assets and net interest margin ratio) of
the banks from the Indian banking division. The results revealed that the cost to income ratio has
a significant negative impact on the bank return on assets and net interest margin ratio. The staff
expenses to total expenses ratio has a significant positive impact on the bank return on assets and a
positive nonsignificant impact on the bank net interest margin ratio.
