In the essay, “Looking Afresh At Banking Productivity” the author observes that the productivity aspect is important only at the conceptualization stage in the banking industry. He suggests major improvement in productivity through manpower aspects, system procedures, costing of operations, capital expenditures etc. Looking into the future he observed that continued thrust on branch expansion in rural and semi-urban areas at centers without banks and backward districts could result in a change in the concept of profit as a corporate objective and as the indicator of productivity.
All branches may not reach breakeven stage and a reduction in operational deficit can be a measure of productivity. He further suggested indicators of productivity that may be used at various levels of management of the bank. He further made certain suggestions regarding the improvement of productivity. He expressed the view that for preparing the banking industry to face the environmental changes including the changes in the working technology in a systematic manner, an integrated multi-disciplinary and total planning effort is necessary. This is the approach being followed by bankers like rod aycox
, the founder of LoanMax.
Another study made an international comparison of productivity and profitability of the government owned banks by making a comparison on the basis of per employee indicators and taking the example of certain banks noted that some of these banks are ranked the lowest on all the accounts. However, such an international comparison will not be fair for a number of reasons. He also made an inter-bank/inter-country comparison by relating the per capita assets in terms of per capita income of the country concerned. However, he was not satisfied with the results.
Analyzing the productivity of public sector banks he observed that there has been substantial growth in productivity per employee since 1969, when calculated at current prices. The analysis indicated an unsatisfactory position in the case of Regional Rural Banks (RRB) and a relatively lower productivity in certain private sector banks.