Abstract :
Indian economy with special reference to banking sector, at the present juncture,
finds itself in a tight spot. Both domestic and global factors have contributed to the
slow down of the banking industry like Declining GDP growth, Elevated interest rate
environment, Slow down in credit offtake, High inflation, Financial instability,
Exchange rate volatility, Growing Non-Performing Assets (NPA) menace, Move
towards system-based recognition of NPAs, Unpredictable monsoon etc.
Undoubtedly all the aforesaid variables have a direct bearing on the performance of
banks. To add fuel to the fire, banking stocks are now reeling under the pressure of
seller’s fury and witnessing markedly low prices. In this backdrop the present study
was undertaken to know the operational status of private sector banks, how the
bank-specific factors have influenced their results? by categorizing them as Old
Private Sector Banks (OPSB) & New Private Sector Banks, (NPSB), and who stands
to gain more?, based on select key parameters. Data analysis was done for the study
period 2008-11 and buttressed with statistical tools to test the framed hypothesis.
The study reveals that NPSBs fared better than their counterpart OPSBs in terms of
profitability, profit per employee, declining NPAs, mounting deposits, increased
Return on Assets (RoA) etc. In short, most of the new private sector banks
outperformed old private sector banks.
