MEASURING THE EFFICIENCY IN LENDING OPERATIONS OF STATE CO-OPERATIVE BANKS IN INDIA

Abstract

Co-operatives are member driven and democratic in nature and played a pioneering role in providing agricultural credit to a very large rural population, especially in remote areas. The State Co-operative Banks (SCBs) are the apex level co-operative credit institutions and play a significant role in the functioning and growth of the co-operative credit structure in the respective states. Financial assistance from Reserve Bank of India and National Bank for Agriculture and Rural Development (NABARD) are mainly routed through the state co-operative banks and hence they have to ensure efficiency in their lending operations. The study has used the benchmarking technique DEA and revealed higher deviations in efficiency scores among state co-operative banks. The problems and challenges of SCBs differ from state to state. Hence in every state, the management and the regulating authorities should work on transforming the co-operative credit system into a viable and self- sustaining system by identifying and addressing their core inefficiencies.