CHAPTER III

Productivity of Indian Banks and Information Technology - An Analysis

3.1 Introduction Since inception, banking has always been a commercial venture, the prime motive of the banks being to enlarge profits, by adopting the current change in the economic environment like liberalization, privatization and globalization since 1991. Due to this, Indian banking has undergone a sweeping change where deregulation, technological innovations and globalization are significantly affecting the banking services. New technology has revolutionized the banking business led paradigm shift in business environment. New technological changes like ATMs, credit cards, internet-banking, EFTs etc. along with other aspects of transformation, are replacing traditional products and services and creating new scale in banking environment as Singh, Chhatwal, Yahyabhoy and Yeo (2002) recognize that being in a fiercely competitive industry, the ability of banks to differentiate themselves on the price is limited but ebanking serves the purpose of differentiation strategy to meet the competition. All the banks have to be well-versed in IT, its uses and application to meet emerging international competition. Private and foreign banks have been the early adopters of technological innovations and gaining the fruits in terms of improved efficiency and customer satisfaction while public sector banks are beginning to hold on to the competition. Garg M. (1994) also analyzes that foreign banks earn as much profits as of 20 nationalized banks earn. Swamy (2001) also have similar view point and concludes that new private sector banks are much better in efficiency than public sector banks. It is whole because of better technology Utilization. ICICI and SBI Banks have taken a lead in introduction of ebanking in India. ICICI Bank is the first one to introduce internet-banking for limited number of services. The new private sector banks and foreign banks gain lead by merely invested in best of breed ebanking solutions from the start. There are number of studies on productivity evaluation but scholarly research on analysis of technologys impact on banks productivity is still not conducted in India. Consequently, in 68

sight of growing technology usage in banking system, it has become imperative to evaluate the performance of the banking industry. In the present chapter an attempt has been made to analyze the branch and employee productivity in terms of various factors and further the impact of IT on productivity is examined to know whether IT is positively contributing towards productivity or negatively. The analysis is made on the basis of available information and divided into two parts, first part explains the trends and growth in selected ratios of productivity and Information Technology and second part analyzes the impact of IT on employee and branch productivity. Trend Analysis of Productivity 3.2 Employee Productivity Employee productivity is an important part of total productivity which comprise of per employee productivity means units of production by an individual in terms of deposits, credits, business, total income, total expenditure, establishment expenditure and spread. It is worth mentioning that due to progressive use of technology, employees strength has departed but their job has become so important that if not performed well, it is dangerous as well trim down the performance rather to enhance. Therefore, efficient use of IT strengthens the business surprisingly as proved by performance in post-ebanking period in the following analysis. 3.2.1 Deposits per Employee Deposits per employee represent the potency of the banks in liquidity support. Table 3.1 depicts that during pre-ebanking period, G-III is at a peek with Rs.5.14 crores average which is above the industry average i.e. Rs.0.84 crores only. But, during post-ebanking period, G-IV gain a lead by way of the highest average i.e. Rs.5.51 crores, even industry, though get enhanced, is at lower level with Rs.2.08 crores average but incompatible with partially IToriented banks. It is evidence from the data that performance has really been improved in post-ebanking period at an exciting growth rate in all bank groups and industry at all, but only G-III witnesses the decline at marginal rate. It is not a matter of fact because G-III is already at the top among all bank groups. The improvement is addressed as productivity gap in both averages and it is between one and two Per cent. Although, post-ebanking period is testimony for improved performance of the whole banking industry but partially IT-oriented banks along with the industry are at larger distance with more variations whereas fully IT-oriented banks have 2 to 3 times more concert with greater stability. But still it cant be ignored that Indian 69

banking industry has substantiated excellent improvement in post-ebanking period through escalating trend. It is whole the transformation effect where IT, along with other factors, is a more productive stick. Here, G-IV accounts a greater change (Rs.1.97 crores) in its average in post-ebanking period and hence proved a more end product of transformation through IT. Undoubtedly, it is concluded that performance in post-ebanking period has been impressively improved in all bank groups but partially IT-oriented banks are still not harmonized with fully IT-oriented banks. It is imperative to note that bank groups, with greater stability confirm greater performance. Post-ebanking period is steadier than pre-ebanking period. In due course, it is evident that IT along with other factors, is transforming the deposits per employee of Indian banking industry with utmost effect on G-IV. Table 3.1
Deposits per Employee Years G-I G-II G-III G-IV 1996-97 0.51 0.65 4.81 2.61 1997-98 0.60 0.77 3.92 2.91 1998-99 0.72 0.94 5.31 3.08 Pre 1999-2000 0.84 1.13 6.62 3.65 ebanking 2000-01 1.08 1.32 5.04 5.46 Average 0.75 0.96 5.14 3.54 S.D. 0.22 0.27 0.98 1.14 C.V. (%) 29.33 28.13 19.07 32.20 2001-02 1.28 1.47 4.89 5.84 2002-03 1.43 1.94 6.17 5.88 2003-04 1.63 2.08 5.06 5.44 2004-05 1.92 2.24 4.92 5.03 Post 2005-06 2.20 2.58 5.09 5.43 ebanking 2006-07 2.70 3.05 4.56 5.41 Average 1.86 2.23 5.12 5.51 S.D. 0.53 0.54 0.55 0.32 C.V. (%) 28.49 24.22 10.74 5.81 Combined Average 1.36 1.65 5.13 4.61 Avg. Productivity Gap 1.11 1.27 -0.02 1.97 Source: 1. Performance Highlights of IBA (1996-97 to 2006-07) 2. Report on Trends and Progress of Banking in India (2000 to 2007) Period (Rs. Crores) Industry 0.56 0.67 0.80 0.95 1.21 0.84 0.25 29.76 1.43 1.60 1.85 2.14 2.49 2.99 2.08 0.58 27.88 1.52 1.04

3.2.2 Credits per Employee Credit per employee shows the efficiency of the banks that how efficiently the banks share out their funds in profitable investments. Table 3.2 is a visible indication for superior efficiency in post-ebanking period over the pre-ebanking period. During pre-ebanking period, G-III witnesses the highest average i.e. Rs.2.73 crores with the lowest variations; comparatively industry confirms just Rs.0.41 crores average which is incompatible with the partially IToriented banks. Correspondingly during post-ebanking period, G-IV demonstrates the highest 70

average (Rs.4.39 crores) but industry substantiate only Rs.1.32 crores average having 41 pc variations. Combined average strengthens the overall efficiency where again fully IT-oriented banks steal a look. The average productivity gap, ranging from Rs.0.76 crores to Rs.2.06 crores, between both the time periods is the testimony for better efficiency in the postebanking period over the pre-ebanking period. This augmentation is also the uppermost in fully IT-oriented banks in contrast of partially IT-oriented banks, where again G-IV is at the peek with Rs.2.06 crores increase. Combined average also proves that partially IT-oriented banks even industry, are still far away from these banks having 4 to 5 times lesser average. Overall, it is concluded that though partially IT-oriented banks are far away from fully IToriented banks but their enhanced average in post-ebanking period is the testimony of their best labors to footstep with these banks. Hence, it is confirm that IT along with other factors is the ultimate solution for transforming the efficiency of whole banking industry in India and fully IT-oriented banks are the end product of this bank transformation. Table 3.2
Credits per Employee Years 1996-97 1997-98 1998-99 Pre 1999-2000 ebanking 2000-01 Average S.D. C.V. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 ebanking 2006-07 Average S.D. C.V. (%) Combined Average Avg. Productivity Gap Source: Same as in table 3.1 Period G-I 0.25 0.26 0.34 0.41 0.52 0.36 0.11 30.56 0.63 0.72 0.84 1.14 1.50 1.90 1.12 0.50 44.64 0.77 0.76 G-II 0.36 0.39 0.47 0.57 0.68 0.49 0.13 26.53 0.77 1.05 1.10 1.31 1.65 1.90 1.30 0.42 32.31 0.93 0.81 G-III 2.89 2.58 2.62 3.14 2.42 2.73 0.28 10.26 4.07 4.77 3.67 3.83 3.94 3.55 3.97 0.43 10.83 3.41 1.24 G-IV 1.89 1.62 1.94 2.65 3.57 2.33 0.79 33.91 4.23 4.43 4.13 4.38 4.65 4.53 4.39 0.19 4.33 3.46 2.06 (Rs. Crores) Industry 0.29 0.29 0.38 0.47 0.60 0.41 0.13 31.71 0.77 0.87 1.02 1.34 1.75 2.15 1.32 0.54 40.91 0.90 0.91

3.2.3 Business per Employee Business per employee is a potency of the banks, a combination of deposits and credits. Table 3.3 depict the similar picture where, G-III is at a glance with Rs.7.87 crores average follow by G-IV having Rs.5.88 crores average but comparatively industry with just Rs.1.24 crores 71

average shows a poor performance in pre-ebanking period. During post-ebanking period, GIV gain a lead by way of Rs.9.90 crores average against industry and partially IT-oriented banks minutes below Rs.4 crores average. It is imperative to note that fully IT-oriented banks prove greater average, lesser variations in distinction of partially IT-oriented banks and industry having poor performance due to higher variations along with other factors. Combined average also portrays the similar picture where fully IT-oriented banks are outlying the partially IT-oriented banks during the whole study period. Table 3.3
Business per Employee Years 1996-97 1997-98 1998-99 Pre 1999-2000 ebanking 2000-01 Average S.D. C.V. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 ebanking 2006-07 Average S.D. C.V. (%) Combined Average Avg. Productivity Gap Period G-I 0.76 0.86 1.06 1.25 1.60 1.11 0.33 29.73 1.91 2.15 2.47 3.06 3.69 4.61 2.98 1.03 34.56 2.13 1.87 G-II 1.01 1.16 1.40 1.70 2.00 1.45 0.40 27.59 2.24 2.99 3.17 3.55 4.23 4.96 3.52 0.96 27.27 2.58 2.07 G-III 7.70 6.50 7.94 9.76 7.46 7.87 1.19 15.12 8.96 10.94 8.73 8.75 9.02 8.11 9.09 0.96 10.56 8.53 1.22 G-IV 4.51 4.54 5.03 6.31 9.03 5.88 1.90 32.31 10.07 10.31 9.57 9.40 10.08 9.95 9.90 0.34 3.43 8.07 4.02 (Rs. Crores) Industry 0.85 0.96 1.18 1.41 1.80 1.24 0.38 30.65 2.20 2.47 2.87 3.48 4.24 5.15 3.40 1.13 33.24 2.42 2.16

The data is testimony for striking improvement (Rs.1 crore to Rs.4 crores) in banks concert in post-ebanking period over pre-ebanking period. The positive slit shows an incessant augmentation in banks performance. G-IV accounts a noteworthy growth rate i.e. Rs.4.04 crores where industry demonstrates Rs.2.16 crores acceleration follow by G-II. Although, GIII is grow up by Rs.1.22 crores even record the highest average of Rs.8.53 crores with greater steadiness. Entire data concludes that business per employee is the indication of remarkable expansion in post-ebanking period especially in partially IT-oriented banks, although fully IToriented banks are at a glance with greater average. This is whole due to their pains for stepping up into competition proved by amplified variations but performance of fully IToriented banks is more steady supporting bigger average. It is transformation affect in form of

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IT sustained by some other factors where G-IV is an artifact of transformation with paramount outcome of IT. 3.2.4 Total Expenditure per Employee Total expenditure per employee gives an idea about the banks spending through the employees for operating the business. Table 3.4 demonstrates that fully IT-oriented banks spend at the highest rate as compare to partially IT-oriented banks. In both pre and post ebanking period, fully IT-oriented banks witness higher averages than partially IT- oriented banks where G -IV confirms the highest average that is Rs.0.66 crores in pre-ebanking period and Rs.0.78 crores in post-ebanking period. Industry shows Rs.0.10 crores and Rs.0.21crores average respectively in pre and post-ebanking period. Combined average also prop up that fully IT-oriented banks are at the forefront of partially IT- oriented banks. Average expenditure gap in pre and post-ebanking period validates a rising pattern where G-IV steals a look with the highest increment of Rs.0.12 crores where industry adds Rs.0.11 crores. Concerns that G-III is the only group performed well to turn down its expenditure by Rs.0.03 crores all through the whole study period. It is essential to conclude that, due to IT enrichment, expenditure of the industry has gone up even though at marginal speed but G-III has proved its potency to cut down its expenditure an optimistic summit of their better management of expenditure. Table 3.4
Total Expenditure per Employee Years 1996-97 1997-98 1998-99 Pre 1999-2000 ebanking 2000-01 Average S.D. C.V. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 ebanking 2006-07 Average S.D. C.V. (%) Combined Average Avg. Productivity Gap Source: Same as in table 3.1 Period G-I 0.07 0.07 0.09 0.10 0.12 0.09 0.02 22.22 0.14 0.15 0.16 0.17 0.20 0.22 0.17 0.03 17.65 0.14 0.08 G-II 0.09 0.10 0.12 0.14 0.15 0.12 0.03 25.00 0.18 0.21 0.20 0.20 0.22 0.24 0.21 0.02 9.52 0.17 0.09 G-III 0.62 0.59 0.66 0.69 0.55 0.62 0.06 9.68 0.50 1.01 0.61 0.47 0.48 0.48 0.59 0.21 35.59 0.61 -0.03 G-IV 0.48 0.54 0.59 0.69 1.01 0.66 0.21 31.82 1.04 0.87 0.73 0.64 0.69 0.73 0.78 0.15 19.23 0.73 0.12 (Rs. Crores) Industry 0.07 0.08 0.10 0.11 0.14 0.10 0.03 30.00 0.17 0.18 0.19 0.20 0.23 0.26 0.21 0.03 14.29 0.16 0.11

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On the whole, it is concluded that IT, along with other factors, influence the per employee expenditure of the banking industry establish by higher average in post-ebanking period in excess of pre-ebanking period. G-IV attests the extreme effect with greater average and it is the lowest in G-I. Fully IT-oriented banks proves larger expenditure mostly due to their lesser number of employees and higher cost on IT enhanced infrastructure which is a muscle of these banks for incarcerate top place in whole banking industry. 3.2.5 Total Earning per Employee Total earnings per employee affirm the banks efficiency to make profits through the employees. A relative picture of earning per employee in table 3.5 demonstrates that G-III is the peep of pre-ebanking period by means of Rs.0.70 crores average and same is the G-IV through Rs.0.69 crores average, where industry demonstrates just Rs.0.11 crores average with 27.27 pc variations. During post-ebanking period, G-IV fleet a look by way of Rs.0.91 crores average and larger stability but industry observe just Rs.0.23 crores average. Combined average also confirms that fully IT-oriented banks have the highest average in comparison to partially IT-oriented banks. The average productivity gap is rationale of enhanced earnings during post-ebanking period. All bank groups record an improvement where G-IV is at a peak with Rs.0.22 crores increment and industry confirms Rs.0.12 crores growth. Here also, G-III consequences decline of Rs.0.03 crores in its average earnings per employee. Table 3.5
Total Earnings per Employee Years 1996-97 1997-98 1998-99 Pre 1999-2000 ebanking 2000-01 Average S.D. C.V. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 ebanking 2006-07 Average S.D. C.V. (%) Combined Average Avg. Productivity Gap Source: Same as in table 3.1 Period G-I 0.06 0.08 0.09 0.10 0.13 0.09 0.03 33.33 0.15 0.17 0.18 0.19 0.22 0.25 0.19 0.04 21.05 0.15 0.10 G-II 0.09 0.11 0.12 0.15 0.16 0.13 0.03 23.08 0.20 0.24 0.23 0.20 0.23 0.27 0.23 0.03 13.04 0.18 0.10 G-III 0.72 0.68 0.73 0.77 0.60 0.70 0.64 91.43 0.54 1.10 0.71 0.55 0.55 0.54 0.67 0.22 32.84 0.68 -0.03 G-IV 0.53 0.58 0.64 0.76 0.94 0.69 0.16 23.19 1.05 1.02 0.89 0.76 0.83 0.90 0.91 0.11 12.09 0.81 0.22 (Rs. Crores) Industry 0.02 0.09 0.10 0.12 0.15 0.11 0.03 27.27 0.18 0.20 0.22 0.22 0.26 0.30 0.23 0.04 17.39 0.17 0.12

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The data proves the transformation outcome through IT and some other factors in postebanking period for the reason that average has enhanced in comparison of pre- ebanking period. While, average earnings have been improved, still partially IT- oriented banks are at larger expanse from fully IT- oriented banks just about 4-5 times smaller average moreover industry is not as good as fully IT- oriented banks. In general, a conclusion can be drawn from the facts that fully IT- oriented banks have greater average earnings per employee still enlarged in whole banking industry apart from G-III. GIV demonstrates the supreme outcome of IT along with some other factors but G-I is at the smallest amount. Post- ebanking period is steadier than pre-banking period with larger constancy. 3.2.6 Establishment Expenditure per Employee Establishment expenditure represents the banks expenditure on human resources for salary, pension, gratuity etc. The figures in table 3.6 describe the relative picture of pre and postebanking period. In pre-ebanking period, all bank groups and industry report Rs.0.02 crores average excluding G-IV which is spending Rs.0.05 crores average expenditure on its employees. In the post-ebanking period, fully IT- oriented banks bear out more average than partially IT- oriented banks and industry where G-IV sneak a look by way of Rs.0.08 crores average expenditure and larger stability. Combined average also portrays the same picture which is in good turn of fully IT- oriented banks. Post-ebanking period is the sight concluding boost in expenditure above the pre-ebanking period and it ranges between Rs.0.01 to Rs.0.03 crores. Even though it is enlarged in the whole banking industry, but G-IV witnesses the uppermost increase of Rs.0.03 crores. Average per employee establishment expenditure is far above the ground in fully IT- oriented banks in comparison to partially IT- oriented banks and industry, which is primarily due to their lesser number of employees and more expenditure to grasp extremely capable force. Consequently, established expenditure all through post-ebanking period has been enlarged at marginal rate in all bank groups but partially IT-oriented banks are not spending a large amount on human resources as fully IT oriented banks are, especially G-IV which is spending nearly 4 times more. It is crucial to note that G-IV shows the paramount effect of IT along with other factors with greater reliability, comparatively industry proves steady change.

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Table 3.6
Establishment Expenditure per Employee Years 1996-97 1997-98 1998-99 Pre 1999-2000 ebanking 2000-01 Average S.D. C.V. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 ebanking 2006-07 Average S.D. C.V. (%) Combined Average Avg. Productivity Gap Source: Same as in table 3.1 Period G-I 0.01 0.01 0.02 0.02 0.03 0.02 0.01 50.00 0.03 0.03 0.03 0.03 0.04 0.02 0.03 0.01 33.33 0.02 0.01 G-II 0.01 0.01 0.02 0.02 0.02 0.02 0.01 50.00 0.02 0.03 0.03 0.03 0.03 0.04 0.03 0.01 33.33 0.02 0.01 G-III 0.01 0.02 0.02 0.02 0.02 0.02 0.00 0.00 0.02 0.04 0.04 0.04 0.04 0.08 0.04 0.02 50.00 0.03 0.02 G-IV 0.04 0.04 0.05 0.06 0.07 0.05 0.01 20.00 0.10 0.09 0.08 0.08 0.09 0.03 0.08 0.02 25.00 0.07 0.03 (Rs. Crores) Industry 0.01 0.01 0.02 0.02 0.03 0.02 0.01 50.00 0.03 0.03 0.03 0.03 0.04 0.03 0.03 0.00 00.00 0.03 0.01

3.2.7 Spread per Employee Spread is the difference between interest earned and interest paid and gives an idea about net interest margin earned by the banks through interest bearing business. Higher spread contributes to higher profits. Table 3.7 exposes that G-IV is at a peek with the highest average (Rs.0.19 crores) even beyond the industry i.e. Rs.0.03 crores in the pre-ebanking period. All through post-ebanking period, G-IV creeps a look with the highest average i.e. Rs.0.32 crores yet industry, even if acquire enrichment, is at lower stage with Rs.0.08 crores average but above the G-I and II (Rs.0.07 crores). Combined average also supports alike conclusion that fully IT- oriented banks are superior to partially IT- oriented banks. It is apparent from the table facts that spread has really been improved in post-ebanking period at an exciting growth rate in whole banking industry. The improvement can be judged from average gap which is also the uppermost in G-IV i.e. Rs.0.13 crores while industry proves Rs.0.05 crores escalation higher than the G-I and G-II. Although, post-ebanking period is an eye witness for inspiring growth over pre-ebanking period, but partially IT- oriented banks and even industry are at larger gap from fully IT- oriented banks having 5 times more concert. It is important to note that G-III too has 3 times slighter average from G-IV. However it cant be ignored that whole industry has substantiated excellent expansion of spread per employee in post-ebanking 76

period through escalating trends. It is whole the transformation concern where IT along with other factors, is the most fruitful stick. Certainly, it is concluded that per employee spread, throughout post-ebanking has been remarkably improved in all bank groups where G-IV steal a look however partially IT-oriented banks still not corresponding with these banks. Consequently, post-ebanking period is steadier where IT along with other aspects is the decisive artifact of transformation affecting the G-IV in a bulk. Table 3.7
Spread per Employee Years 1996-97 1997-98 1998-99 Pre 1999-2000 ebanking 2000-01 Average S.D. C.V. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 ebanking 2006-07 Average S.D. C.V. (%) Combined Average Avg. Productivity Gap Source: Same as in table 3.1 Period G-I 0.02 0.02 0.02 0.03 0.04 0.03 0.01 33.33 0.04 0.05 0.06 0.07 0.08 0.09 0.07 0.02 28.57 0.05 0.04 G-II 0.02 0.02 0.02 0.03 0.04 0.03 0.01 33.33 0.04 0.06 0.06 0.07 0.08 0.09 0.07 0.02 28.57 0.05 0.04 G-III 0.17 0.03 0.03 0.04 0.06 0.07 0.06 85.71 0.06 0.08 0.10 0.11 0.12 0.15 0.10 0.03 30.00 0.09 0.03 G-IV 0.16 0.17 0.18 0.24 0.20 0.19 0.03 15.79 0.23 0.33 0.32 0.30 0.34 0.37 0.32 0.05 15.63 0.26 0.13 (Rs. Crores) Industry 0.02 0.02 0.03 0.03 0.04 0.03 0.01 33.33 0.05 0.06 0.07 0.08 0.09 0.10 0.08 0.02 25.00 0.05 0.05

3.2.8 Employee Productivity Index Employee productivity is the collective upshot of different employee productivity factors evaluated in above tables and give an idea about the employees efficiency in terms of different aspects. It is obvious as of table 3.8 that employee productivity is superior in postebanking period against pre-ebanking period established by average gap ranging between 3 and 10 score. In pre-ebanking period fully IT-oriented banks are at the top enclosing 52.78 and 52.12 average score respectively of G-IV and G-III where industry shows the lowest average i.e. 40.25 but in compatible with partially IT-oriented banks. In post-ebanking period, G-IV steals a look with 62.67 average where industry again is at lower rank. Combined average also in excellent turn of fully IT-oriented banks where G-I is at the lowest level. G-IV take a lead by way of 9.89 scores enlargement follow by industry (4.93) but still all the bank 77

groups have accomplished more than 4 points growth in their average employee productivity in post-ebanking period. It is essential to note that partially IT-oriented banks are at bigger diversity from fully IT-oriented banks which is mostly due to their over employment base and poor IT infrastructure. The whole data concludes that post-ebanking period is proved steadier than pre-ebanking period but partially IT-oriented banks still not synchronized with fully IT-oriented banks. The perfection is the end result of transformation where IT along with other factors is renovating the employee productivity at a striking rate with utmost effect on G-IV. Table 3.8
Employee Productivity Index Years G-I 1996-97 38.29 1997-98 39.50 1998-99 40.57 Pre 1999-2000 40.86 ebanking 2000-01 42.16 Average 40.28 S.D. 1.46 C.V. (%) 3.62 2001-02 42.67 2002-03 43.06 2003-04 43.49 2004-05 44.24 Post 2005-06 45.93 ebanking 2006-07 47.08 Average 44.41 S.D. 1.74 C.V. (%) 3.92 Combined Average 42.53 Avg. Productivity Gap 4.13 Source: Computed from above tables Period G-II 39.01 40.09 41.21 41.74 42.15 40.84 1.28 3.13 42.71 44.54 44.65 44.94 45.91 47.90 45.11 1.72 3.81 43.17 4.27 G-III 49.05 51.25 53.21 55.45 51.64 52.12 2.38 4.57 53.04 61.30 55.37 54.11 54.46 56.03 55.72 2.92 5.24 54.08 3.60 G-IV 47.03 49.87 51.63 54.74 60.61 52.78 5.20 9.85 64.55 63.19 60.48 59.42 61.39 6 7.01 62.67 2.82 4.50 58.17 9.89 Industry 37.01 39.70 40.78 41.17 42.57 40.25 2.08 5.17 43.26 43.68 44.24 44.96 46.84 48.09 45.18 1.90 4.21 42.94 4.93

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Figure 3.1: Average Employee Productivity Index

Average Score

200 150 100 50 0 G-I Comined Average G-II G-III Post-ebanking Average G-IV Industry Pre-ebanking Average

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3.3 Branch Productivity Branch productivity, a crucial factor of total productivity, evaluates branch level productivity means proportionate production of the banks per branch in terms of deposits, credits, business, total income, total expenditure and establishment expenditure. Every branch contributes rigorously to the productivity of a total bank and thus an outcome of all the branches functioning under the same bank. A sole branch can twist the portrait of entire business subsequent to evaluate the whole business properly. It is equally important to note that per branch productivity portrays the real picture and hence kicks off the banks to take necessary steps to be in command of the adverse position, if so. IT is playing a vital role in transforming the business so forth branches are not the exceptions. Thats why branch productivity is necessary to evaluate in the era of IT to examine that how the branch level productivity is responding? 3.3.1 Deposits per Branch Deposits give an idea about the vigor of the banks. From table 3.9, it is evident that G-IV witnesses the highest average deposits per branch i.e. Rs.282.08 crores with larger variations in comparison of other bank groups and industry shows just Rs.15.38 crores average encompassing greater stability in pre-ebanking period and G-III by means of Rs.79.93 crores average, is also far behind G-IV. In post-ebanking period also, G-IV demonstrates just about double the average of pre-ebanking period and is at the top with Rs.471.17 crores average. GI explains the least average whereas industry, although poorer than fully IT-oriented banks but accounts higher average than partially IT-oriented banks i.e. Rs.33.00 crores. Combined average also depicts the same picture. Average productivity gap is a testimony for remarkable improvement in deposits during post-ebanking period by twofold over pre-ebanking period and G-IV steals a look with an excellent growth of Rs.189.09 crores where industry proves Rs.17.62 crores improvement in average. The upgrading in performance of whole banking industry is remarkable but partially IToriented banks still not harmonized with the fully IT-oriented banks and demonstrate 5 to 18 times lesser combined average all through the study period. Somewhat post-ebanking period is steadier and proves greater stability than pre-ebanking period. The foremost conclusion drawn from the facts is that post-ebanking period authenticates an excellent growth in average deposits per branch over pre-ebanking period where fully IT-oriented banks above all G-IV substantiate the highest average, an inspiring impact of IT along with other factors. Hence, IT 80

with other factors is the end product for transforming the deposits per branch and the banks put on good quality strength of liquidity through enhanced deposits. Table 3.9
Deposits per Branch Years 1996-97 1997-98 1998-99 1999-2000 Pre ebanking 2000-01 Average S.D. C.V. (%) 2001-02 2002-03 2003-04 2004-05 24.71 2005-06 2006-07 Average S.D. C.V. (%) Combined Average Avg. Productivity Gap Source: Same as in table 3.1 Period G-I 10.03 11.74 13.89 15.93 18.55 14.03 3.37 24.02 20.89 23.10 26.11 30.02 33.34 38.93 28.73 6.74 23.46 22.05 14.70 G-II 8.75 10.66 12.30 14.54 17.05 12.66 3.25 25.67 18.61 24.32 24.93 26.20 28.83 33.60 26.08 4.99 19.13 19.98 13.42 G-III 95.55 49.20 80.59 99.11 75.22 79.93 19.87 24.86 90.07 116.91 120.49 121.73 154.14 164.06 127.90 26.98 21.09 106.10 47.97 G-IV 212.46 238.18 264.12 272.51 423.14 282.08 82.29 29.17 438.84 383.94 367.54 613.50 460.51 562.66 471.17 98.12 20.82 385.22 189.09 (Rs. Crores) Industry 10.88 12.87 15.06 17.56 20.51 15.38 3.80 24.71 23.08 25.88 29.69 33.88 39.05 46.40 33.00 8.68 26.30 24.99 17.62

3.3.2 Credits per Branch It can be seen from table 3.10 that G-IV is at the top with Rs.185.55 crores average even shows the highest variations in pre-ebanking period. Industry, contrary of partially IT-oriented banks, has just Rs.7.43 crores average proves an unforeseen gap. Correspondingly, postebanking period validates a top position of G-IV (Rs.381.07 crores) and industry still proves just Rs.20.81 crores average with lesser stability, little bit higher than partially IT-oriented banks. Combined average also depicts the similar picture. Data is a testimony of such an excellent improvement in average credits per branch during post-ebanking period over preebanking period, where G-IV witnesses a greater change i.e. Rs.195.52 crores in average proves an end product of transformation. Although, all bank groups and industry substantiate remarkable growth ranging between Rs.8 crores and Rs.196 crores throughout the study period still there is a huge gap between partially and fully IT-oriented banks and even industry have 5 to 20 times lesser average and more variations. It is concluded from the data that postebanking period records noteworthy progress over pre-ebanking period in all bank groups where fully IT-oriented banks, more particularly G-IV, creep a look and consequently 81

establish the more end product of transformation. This is whole because of IT and some other factors; Indian banking has certainly shifted the performance with utmost effect on G-IV. Table 3.10
Credits per Branch Years 1996-97 1997-98 1998-99 1999-2000 Pre ebanking 2000-01 Average S.D. C.V. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 ebanking 2006-07 Average S.D. C.V. (%) Combined Average Avg. Productivity Gap Source: Same as in table 3.1 Period G-I 4.92 5.02 6.46 7.65 8.96 6.60 1.73 26.21 10.35 11.74 13.47 17.85 22.73 27.49 17.27 6.74 39.03 12.42 10.67 G-II 4.80 5.44 6.11 7.29 8.84 6.50 1.60 24.62 9.78 13.15 13.14 15.29 18.40 20.97 15.12 4.03 26.65 11.20 8.62 G-III 57.38 32.38 39.79 47.04 36.08 42.53 9.91 23.30 75.04 90.42 87.27 94.83 119.26 127.94 99.13 20.25 20.43 73.40 56.60 G-IV 153.10 132.87 166.58 198.11 277.09 185.55 56.40 30.40 318.07 288.99 278.83 534.17 394.96 471.41 381.07 104.59 27.45 292.20 195.52 (Rs. Crores) Industry 5.58 5.59 7.21 8.66 10.13 7.43 1.98 26.65 12.46 14.12 16.29 21.22 27.37 33.42 20.81 8.21 39.45 14.73 13.38

3.3.3 Business per Branch Business is a total strength of the banks comprises deposits and credits. Table 3.11 shows that G-IV fleet a look with the uppermost average business Rs.467.63 crores where industry shows just Rs.22.81 crores, 20 times lesser than G-IV in pre-ebanking period. Similarly, postebanking period bears out all bank groups even industry record double average in contrast to pre-ebanking period where also G-IV witnesses the highest average i.e. Rs.852.24 crores and industry is at lower level have an average of Rs.53.84 crores. Combined average also describes the related image. Post-ebanking period demonstrates inspiring enhancement almost twice in excess of pre-ebanking period. At this juncture, G-IV witnesses Rs.384.61 crores growth in average business in post-ebanking period where industry proves growth of about Rs.31 crores merely. Even though, business per branch is improved at an excellent rate of growth but partially IT-oriented banks are at a larger distance from fully IT-oriented banks around 20 times lesser average than G-IV though G-III is also farther from G-IV by 4 times. IT with other factors has transformed the business at a greater extent which is really amazing. Overall, it is concluded that business during post-ebanking period has improved at a 82

remarkable growth rate where G-IV is further end result of transformation with extreme effect of IT along with other factors. Apart from G-I and Industry, all others prove more stability during post-ebanking period. Table 3.11
Business per Branch Years 1996-97 1997-98 1998-99 1999-2000 Pre ebanking 2000-01 Average S.D. C.V. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 ebanking 2006-07 Average S.D. C.V. (%) Combined Average Avg. Productivity Gap Period G-I 14.96 16.76 20.34 23.58 27.51 20.63 5.08 24.62 31.24 34.85 39.58 47.87 56.07 66.42 46.01 13.46 29.25 34.47 25.38 G-II 13.55 16.10 18.41 21.84 25.89 19.16 4.84 25.26 28.39 37.48 38.07 41.49 47.23 54.57 41.21 8.98 21.79 31.18 22.05 G-III 152.94 81.58 120.38 146.15 111.31 122.47 28.68 23.42 165.12 207.33 207.76 216.56 273.40 292.00 227.03 47.06 20.73 179.50 104.56 G-IV 365.56 371.05 430.70 470.62 700.23 467.63 137.13 29.32 756.92 672.93 646.38 1147.67 855.47 1034.08 852.24 201.96 23.70 677.42 384.61 (Rs. Crores) Industry 16.46 18.45 22.27 26.22 30.65 22.81 5.76 25.25 35.74 39.99 45.97 55.10 66.42 79.82 53.84 16.83 31.26 39.74 31.03

3.3.4 Total Expenditure per Branch Total expenditure reveals the spending nature of banks for operating business. The figures in table 3.12 explain that G-IV witnesses the highest average i.e. Rs.52.67 crores while stability is lesser. Industry records just Rs.1.89 crores average as partially IT-oriented banks steal a look because of lesser average expenditure in pre-ebanking period. Similarly, in postebanking period also, partially IT-oriented banks have lesser average expenditure but G-IV take an attention with such an elevated average expenditure (Rs.66.10 crores). Combined average also confirms that fully IT-oriented banks report higher average expenditure per branch because of lesser number of branches, just setting up new branches and prosperous IT infrastructure. While G-II proves the smallest amount of average expenditure i.e. Rs.2.06 crores just beneath the industry comprising Rs.2.63 crores average and G-I too is of similar tune because of more number of branches and lower expenditure on IT infrastructure. Complete record is the substantiation of escalating trend in per branch expenditure in postebanking period over pre-ebanking period which is mainly because of IT-enhancement. G-IV

83

witnesses the highest growth i.e. Rs.13.43 crores where industry has Rs.1.36 crores expansion. Wrapping up, partially IT-oriented banks corroborate almost 7 to 25 times lesser expenditure but witness marginal growth in average expenditure. Larger average in postebanking period is testimony for good amount of expenditure on innovative trends in business where G-IV sneaks a look through the highest average. This is complete a transformation effect where amount of factors, more particularly IT impinge on the business robustly. Therefore, it is concluded that post-ebanking period accounts soaring expenditure than preebanking period, where G-IV captures a look but partially IT-oriented banks are not spending such account record lesser profits. Table 3.12
Total Expenditure per Branch Years 1996-97 1997-98 1998-99 Pre 1999-2000 ebanking 2000-01 Average S.D. C.V. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 ebanking 2006-07 Average S.D. C.V. (%) Combined Average Avg. Productivity Gap Source: Same as in table 3.1 Period G-I 1.29 1.38 1.65 1.85 2.14 1.66 0.35 21.08 2.35 2.49 2.58 2.69 2.96 3.23 2.72 0.32 11.76 2.24 0.58 G-II 1.14 1.45 1.55 1.76 1.98 1.58 0.32 20.25 2.30 2.67 2.39 2.30 2.44 2.70 2.47 0.18 7.29 2.06 0.89 G-III 12.32 7.40 9.95 10.27 8.20 9.63 1.92 19.94 9.28 19.05 14.50 11.59 14.40 17.39 14.37 3.60 25.05 12.21 4.74 G-IV 39.67 44.07 50.20 51.35 78.06 52.67 14.96 28.40 78.01 56.54 49.63 78.24 58.17 76.01 66.10 12.75 19.29 60.00 13.43 (Rs. Crores) Industry 1.45 1.58 1.86 2.10 2.44 1.89 0.40 21.16 2.70 2.96 3.04 3.12 3.56 4.14 3.25 0.52 16.00 2.63 1.36

3.3.5 Total Earnings per Branch Total earnings contribute to profitability and hence taken as an efficiency factor of the banks. Table 3.13 gives an idea about increasing trend where G-IV is at the top with Rs.55.14 crores average even above the industry having Rs.2 crores average in pre-ebanking period. In postebanking period also G-IV steals a look by way of Rs.76.95 crores average. Throughout pre and post-ebanking period, G-II records higher stability but lesser average earnings. Combined average envisages that G-IV, however proves the highest amount of total expenditure, still is far ahead the partially IT-oriented banks and industry. It is obvious that a good amount of 84

growth is recorded during post-ebanking period essentially due to escalating trend where GIV is at the top due to the highest growth (Rs.21.81 crores) and G-III traces just Rs.5.34 crores moreover partially IT-oriented banks and industry proves very little growth i.e. Rs.1 or Rs.2 crores only. Hence, post-ebanking period has really established inspiring development in average with larger stability. It is equally important to note that G-IV, although spend the largest amount, records impressive amount of earning too whereas partially IT-oriented banks are earning much lesser though spending the least. Definitely, it can be concluded that earning efficiency throughout post-ebanking period has really been improved where fully IT-oriented banks more particularly G-IV steal a look. But partially IT-oriented banks by means of about 6 to 25 times lesser average, still not harmonized with fully IT-oriented banks. The imposing growth in post-ebanking period is primarily because of IT along with other factors of transformation where fully IT-oriented banks confirm better efficiency. Table 3.13
Total Earnings per Branch Years 1996-97 1997-98 1998-99 Pre 1999-2000 ebanking 2000-01 Average S.D. C.V. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 ebanking 2006-07 Average S.D. C.V. (%) Combined Average Avg. Productivity Gap Source: Same as in table 3.1 Period G-I 1.36 1.49 1.72 1.96 2.23 1.75 0.35 20.00 2.53 2.75 2.93 3.02 3.31 3.62 3.03 0.39 12.87 2.45 1.28 G-II 1.24 1.53 1.62 1.90 2.10 1.68 0.33 19.64 2.53 3.00 2.72 2.37 2.62 2.96 2.70 0.25 9.26 2.24 1.02 G-III 14.35 8.52 11.03 11.48 8.97 10.87 2.33 21.44 9.99 20.79 16.78 13.63 16.56 19.53 16.21 3.94 24.31 13.78 5.34 G-IV 43.48 47.54 54.44 57.07 73.15 55.14 11.43 20.73 78.94 66.66 59.96 92.44 70.59 93.12 76.95 13.71 17.82 67.04 21.81 (Rs. Crores) Industry 1.57 1.71 1.96 2.24 2.53 2.00 0.39 19.50 2.90 3.29 3.46 3.51 4.01 4.68 3.64 0.62 17.03 2.90 1.64

3.3.6 Establishment Expenditure per Branch Establishment expenditure signifies expenditure on human resources and table 3.14 shows that G-IV is the uppermost having Rs.4.26 crores average which is on top of the industry average in pre-ebanking period. In latter period also, G-IV take an attention with Rs.6.67 85

crores average, yet industry is poorer. Combined average also describes the analogous image where again G-IV reports the highest average having much lesser number of branches but partially IT-oriented banks even G-III and industry confirm below Rs.1 crore average proving lesser investment on human resources. The table figures confirm an impressive enhancement in post-ebanking period where G-IV proves greater change (Rs.2.41 crores) but other bank groups dont record even Rs.1 crore growth attesting lesser concentration towards development of quality human resources. It is a subject of consideration that if foreign banks by investing larger on human resources can make maximum profits then why not the other Indian banks can? By and large, it is concluded that post-ebanking period is substantiated for superior concert due to IT along with other factors and IT is the most fruitful tool for current transformation. Partially IT-oriented banks even new private sector banks are not spending to a large extent to put on benefits of quality force. These banks are obliged to pursue the strategies of spending more gain more only then can harmonized with foreign banks. Table 3.14
Establishment Expenditure per Branch Years 1996-97 1997-98 1998-99 Pre 1999-2000 ebanking 2000-01 Average S.D. C.V. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 ebanking 2006-07 Average S.D. C.V. (%) Combined Average Avg. Productivity Gap Source: Same as in table 3.1 Period G-I 0.25 0.28 0.32 0.35 0.45 0.33 0.08 24.24 0.41 0.44 0.48 0.53 0.56 0.32 0.46 0.09 19.57 0.40 0.13 G-II 0.15 0.18 0.20 0.23 0.24 0.20 0.04 20.00 0.27 0.35 0.33 0.32 0.39 0.39 0.34 0.05 14.71 0.28 0.14 G-III 0.35 0.28 0.30 0.35 0.30 0.32 0.03 9.38 0.44 0.84 0.86 0.90 1.18 2.73 1.16 0.81 69.83 0.78 0.84 G-IV 3.38 3.39 4.31 4.79 5.41 4.26 0.89 20.89 7.64 5.74 5.53 9.54 8.00 3.56 6.67 2.13 31.93 5.57 2.41 (Rs. Crores) Industry 0.26 0.28 0.33 0.36 0.45 0.34 0.08 23.53 0.42 0.45 0.49 0.54 0.60 0.44 0.49 0.07 14.29 0.42 0.15

3.3.7 Branch Productivity Index Branch productivity index is a collective upshot of all branch productivity factors. Table 3.15 gives an idea about efficiency at branch level for whole banking business. In pre-ebanking period, G-IV is at a peek with 56.65 average score followed by G-III though it is below 50 in 86

all Indian banks. Post-ebanking period also reveals the same results further sustained by combined average which is the highest in G-IV pursue by G-III whereas others even industry witness nearly 17 scores lesser average. Overall data is a testimony for superior branch productivity all through the post-ebanking period in all bank groups where G-IV steals a look and G-III shows larger distance. It cant be ignored that G-IV records about 9 points growth but all Indian banks prove just 1 or 2 points expansion, even G-IV is spending much higher. Table 3.15
Branch Productivity Index Years G-I G-II G-III 1996-97 41.31 42.01 44.31 1997-98 43.85 43.79 45.29 1998-99 43.94 43.84 46.02 Pre 1999-2000 44.02 43.92 46.41 ebanking 2000-01 44.16 44.00 45.73 Average 43.46 43.51 45.55 S.D. 1.21 0.84 0.81 C.V. (%) 2.78 1.93 1.78 2001-02 44.20 44.08 46.66 2002-03 44.28 44.29 48.36 2003-04 44.38 44.26 47.99 2004-05 44.53 44.28 47.87 Post 2005-06 44.69 44.41 49.04 ebanking 2006-07 45.01 45.74 51.01 Average 44.52 44.51 48.48 S.D. 0.30 0.61 1.46 C.V. (%) 0.67 1.37 3.01 Combined Average 44.03 44.06 47.15 Avg. Productivity Gap 1.06 1.00 2.93 Source: Computed from above tables related to branch productivity Period G-IV 53.10 54.26 56.19 57.20 62.50 56.65 3.64 6.43 64.83 61.09 60.01 71.81 65.14 68.25 65.19 4.40 6.75 61.31 8.54 Industry 41.01 43.88 43.99 44.08 44.22 43.44 1.36 3.13 44.30 44.40 44.52 44.67 44.90 45.54 44.72 0.45 1.01 44.14 1.28

Substantiatly, it can be concluded that post-ebanking period is steadier where G-IV steel a look and partially IT-oriented banks are still lagging behind fully IT-Oriented banks more particularly G-IV. IT with other factors is more productive stick of transformation because it is during post-ebanking period that banks have impressively enhanced their performance in various terms. Consequently, branch productivity is sound at all but still needs some efforts by partially IT-oriented banks to bring into line with fully IT-oriented banks. Certainly, postebanking period is testimony of transformation effect through IT to improve branch productivity. It is not the matter that fully IT-oriented banks are spending larger, but also gaining larger because once spend on IT-infrastructure gives fruitful results for long term.

87

Figure 3.2: Average Branch Productivity Index

200
Average Score

150 100 50 0 G-I Comined Average G-II G-III Post-ebanking Average G-IV Industry Pre-ebanking Average

88

3.4 Information Technology Revolutionary technological changes and discoveries are having a dramatic impact on every organization. Superconductivity advancements alone, that increase the power of electrical products are revolutionizing business operations, especially in service sector as banking industry is one of the most effected one. IT is acting as a national even global economic engine that is spurring the productivity, a critical factor in a banks ability to improve overall performance in the international market. Technological advancements are changing the very nature of opportunities and threats by altering the style, structure, system, culture etc. Because of its alarming effect on Indian banks too, the whole Indian banking industry has been recommended to opt IT as a crucial factor. Private and foreign banks have been the early adopters of technological innovations while public sector banks are beginning to hold on to the competition. Fully IT-oriented banks are exploring all the opportunities but partially IToriented banks are the laggards, proved through the ongoing analysis. 3.4.1 Computerized Branches Narasimahm Committee-II has recommended full computerization of the branches in 1998. Indian new private sector banks and foreign banks have entered in banking industry in 199697 with fully computerized system but public sector banks and old private sector banks are still in mounting stage. Table 3.16 depicts the analogous picture as fully IT-oriented banks are fully computerized from birth whereas partially IT-oriented banks have not computerized even 50 pc of the total branches on an average in pre-ebanking period and hence industry also record just 57.88 pc branches computerized but gains 91.31 pc average computerization during post-ebanking period. Partially IT-oriented banks also creep a look recording an admirable growth of nearly 50 pc where G-I proves an explosive improvement i.e.57.68 pc from 24.82 pc in pre-ebanking period to 82.50 pc average in post-ebanking period. G-II and industry also witness excellent growth i.e. 47.36 pc and 33.43 pc respectively. Combined average also portrays a similar picture where industry has 76.11 pc average during the whole study period. Post-ebanking period confirms remarkable speed of computerization of the branches but still partially IT-oriented banks are not harmonized with fully IT-oriented banks. This is also a major factor for superior productivity of these banks, therefore partially IT-oriented banks should also gain target of full computerization of all the branches and IT should be the potency not be a limitation of these banks.

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Table 3.16
Computerized Branches as Percentage of Total Branches Years G-I G-II 1996-97 0.11 0.02 1997-98 1.82 1.79 1998-99 34.94 8.88 Pre 1999-2000 38.31 13.94 ebanking 2000-01 48.90 19.69 Average 24.82 8.86 S.D. 22.38 8.23 C.V. (%) 90.17 92.89 2001-02 61.36 23.16 2002-03 72.71 46.32 2003-04 79.67 48.60 2004-05 88.87 67.22 Post 2005-06 94.39 71.10 ebanking 2006-07 98.02 80.94 Average 82.50 56.22 S.D. 13.95 20.99 C.V. (%) 16.91 37.33 Combined Average 56.28 34.70 Avg. Technology Gap 57.68 47.36 Source: Information collected through IT Dept., IBA Mumbai Period G-III 100.00 100.00 100.00 100.00 100.00 100.00 0.00 0.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 0.00 0.00 100.00 0.00 G-IV 100.00 100.00 100.00 100.00 100.00 100.00 0.00 0.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 0.00 0.00 100.00 0.00 (Per cent) Industry 49.80 50.00 51.15 60.55 77.91 57.88 12.05 2.08 89.05 91.28 90.67 90.62 90.31 95.91 91.31 2.37 2.60 76.11 33.43

3.4.2 ATMs per Branch ATMs are the most compassionate and speedy tool of IT for banking transactions especially for cash withdrawal and mini statement of account. Table 3.17 shows that only fully IToriented banks have installed ATMs in 1996-97 but G-I in 1997-98 and G-II in 1999-2000. Pre-ebanking period show up the average where G-IV fleet a look with 0.96 average ATMs per branch follow by G-III but industry has just negligible average means not even a single ATM for single branch. Post-ebanking period, with greater variations highlights that whole banking industry has gained excellent improvement in ATMs installation, where G-IV again takes a lead having average 2 ATMs per branch and record admirable growth. Comparatively other bank groups even industry has not installed single ATM per branch on an average although G-III perks up and confirms better record. Combined average establishes similar position. Post-ebanking period demonstrates outstanding improvement through increasing number of ATMs but not inspiring because all the bank groups apart from G-IV has not been succeeded to install even single ATM per branch, rather its not much expensive but makes good amount of income. Partially IT-oriented banks are still not harmonized with fully IToriented banks that are why their performance is comparatively poor. Hence, post-ebanking

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period confirms remarkable performance due to much effect of IT in terms of different channels as ATMs is one of these channels. Table 3.17
ATMs per Branch Years G-I G-II G-III 1996-97 0.00 0.00 0.20 1997-98 0.02 0.00 0.39 1998-99 0.09 0.00 0.86 1999-2000 0.12 0.01 0.64 Pre ebanking 2000-01 0.14 0.12 0.41 Average 0.07 0.03 0.50 S.D. 0.06 0.05 0.25 C.V. (%) 85.71 166.67 50.00 2001-02 0.17 0.16 0.43 2002-03 0.19 0.22 0.59 2003-04 0.20 0.23 0.52 2004-05 0.21 0.27 0.82 Post 2005-06 0.25 0.62 0.89 ebanking 2006-07 0.34 0.86 1.76 Average 0.23 0.39 0.84 S.D. 0.06 0.28 0.49 C.V. (%) 26.09 71.79 58.33 Combined Average 0.16 0.23 0.68 Avg. Technology Gap 0.16 0.36 0.34 Source: Information collected through IT Dept., IBA Mumbai Period G-IV 0.85 0.79 0.84 0.99 1.33 0.96 0.22 22.92 1.31 2.17 1.89 2.94 1.70 2.34 2.06 0.56 27.18 1.56 1.10 Industry 0.02 0.05 0.05 0.05 0.06 0.05 0.02 40.00 0.06 0.09 0.09 0.17 0.16 0.34 0.15 0.10 6.67 0.10 0.10

3.4.3 Credit Cards per Branch Credit cards, an excellent version of IT for banking and shopping in market, has gained momentum share among all IT channels. Table 3.18 shows that during pre-ebanking period, G-IV is the most admired one for credit cards, evidence from its highest average (nearly 1842 cards per branch) whereas industry records average 16 cards per branch only because partially IT-oriented banks have not even 10 cards per branch an awkward figure. Same is the depiction in post-ebanking period where also G-IV takes a lead by means about 4008 average credit cards per branch. Partially IT-oriented banks and industry trace much lesser average just 14 to 36 cards per branch. Combined average also depicts similar picture. Concerns that stability is more in post-ebanking period consequences improved state of affairs. Postebanking period confirms excellent growth in credit cards strength especially in G-IV (2166) whereas other bank groups and industry reports not even 20 cards per branch. G-III takes attention by recording average fall of 141.36 cards per branch mainly because of greater plunge during 2004 2006 and secondly due to the entrance of two new banks (Yes Bank and Kotak Mohindra Bank). Even though post-ebanking period confirms an improved strength of 91

credit cards but still partially IT-oriented banks are not harmonized with fully IT-oriented banks more particularly G-IV, reporting gap in thousands. In general, it is concluded that credit cards of fully IT-oriented banks especially G-IV are much admired as compare to partially IT-oriented banks mainly because of their complete dealing is electronically performed, a foremost feature of current transformation and these banks gaining the most. Table 3.18
Credit Cards per Branch Years G-I G-II G-III 1996-97 0.02 0.00 405.21 1997-98 4.88 0.00 682.05 1998-99 13.98 0.46 846.36 Pre 1999-2000 14.52 0.86 675.18 ebanking 2000-01 16.00 4.96 412.69 Average 9.88 1.26 604.30 S.D. 7.04 2.10 191.06 C.V. (%) 71.25 166.67 31.62 2001-02 16.62 6.97 432.38 2002-03 16.95 12.54 542.95 2003-04 18.11 11.82 506.28 2004-05 19.24 14.79 413.20 Post 2005-06 20.47 16.27 399.54 ebanking 2006-07 38.95 21.69 483.26 Average 21.72 14.01 462.94 S.D. 8.56 4.92 56.78 C.V. (%) 39.41 35.12 12.27 Combined Average 16.34 8.21 527.19 Avg. Technology Gap 11.84 12.75 -141.36 Source: Information collected through IT Dept., IBA Mumbai Period G-IV 576.01 1172.28 1713.16 2381.28 3365.01 1841.55 1081.46 58.73 3340.21 3730.65 3322.63 6110.05 3729.19 3813.83 4007.76 1051.35 26.23 3023.12 2166.21 Industry 10.49 15.40 17.31 17.96 20.91 16.41 3.86 23.52 22.49 32.04 36.21 36.02 35.42 53.99 36.03 10.22 28.37 27.11 19.62

3.4.4 Internet Banking Branches Todays internet banking is also a much popular approach of banking. This ratio represents an extent of branches providing internet banking services. Table 3.19 demonstrates that G-III fleet a look with 36.64 pc average and industry records just 3.31 pc average, 12 times lesser in pre-ebanking period bearing numerous variations. During post-ebanking period also, bank groups perk up average to a great extent where G-III with 74.68 pc average takes an attention moreover industry records just 14.87 pc average in compatible of partially IT-oriented banks. Combined average proves that partially IT-oriented banks accounts a larger distance from fully IT-oriented banks nearly 6 to 7 times that are noteworthy. Constructive gap confirms an impressive growth in internet-banking all through post-ebanking period where G-III tops with 38.09 pc expansion and G-IV follows. Although, partially IT-oriented banks witness 11 to 15 pc growth, but it is not enough since fully IT-oriented banks are 6 to 7 times ahead of these 92

banks and this gap is much higher to be bridged early with effectual efforts. Overall, it is concluded that post-ebanking period is steadier since more average of internet banking and more is the stability as is evidence from the records. It is whole ITs outcome, an important artifact of transformation and, along with other factors, it has pitched a banking business to the commanding heights. Table 3.19
Internet Banking Branches as Percentage of Total Branches Years 1996-97 1997-98 1998-99 Pre 1999-2000 ebanking 2000-01 Average S.D. C.V. (%) 2001-02 2002-03 2003-04 2004-05 Post 2005-06 ebanking 2006-07 Average S.D. C.V. (%) Combined Average Avg. Technology Gap Period G-I 0.00 1.11 1.82 3.04 4.57 2.11 1.76 83.41 6.14 8.68 12.40 13.69 16.29 23.64 13.47 6.15 45.66 8.31 11.36 G-II 0.00 0.00 0.00 3.91 6.26 2.03 2.91 143.35 7.98 15.06 15.61 17.68 20.72 24.98 17.00 5.75 33.82 10.21 14.97 G-III 5.75 13.11 43.48 46.71 74.16 36.64 27.68 75.55 72.98 80.81 77.90 62.88 74.23 79.25 74.68 6.50 8.70 57.39 38.04 G-IV 8.79 16.67 25.57 31.49 42.14 24.93 12.93 51.87 45.58 47.22 41.94 78.01 47.37 56.54 52.78 13.27 25.14 40.12 27.85 (Per cent) Industry 1.25 2.60 3.34 4.10 5.26 3.31 1.51 45.62 7.58 8.59 9.82 12.37 14.81 36.07 14.87 10.71 72.02 9.62 11.56

3.4.5 Mobile Banking Branches Mobile-banking is also trendy even prior to the internet-banking which is mainly availed for balance checking, billing and other account related instructions to the banks. Table 3.20 highlights the major findings where G-III steals a look with 31.85 pc average comparatively G-I & II and industry view just 2 pc average during pre-ebanking period. Post-ebanking period shows improvement incase of all bank groups where G-III again takes a lead with 70.29 pc average about 5 to 7 times more than G-I, II and industry. Combined average also foresees an explosive gap between partially IT-oriented and fully IT-oriented banks that cant be ignored. Gap between pre and post ebanking period signifies growth in mobile banking services in post-ebanking period, where also fully IT-oriented banks capture a look reporting more than 30 pc growth but partially IT-oriented banks demonstrate not even 15 pc growth. Rather partially IT-oriented banks are far behind by way of 5 to 7 times lesser average mainly

93

due to greater variations along with other factors. Generally, it is concluded that postebanking period is steadier with the utmost effect on G-III. This is due to encouraging contribution of IT, the most productive stick of competition. IT, along with other factors is managing tool of transformation that lacks in partially IT-oriented banks. Table 3.20
Mobile Banking Branches as Percentage of Total Branches Years G-I G-II G-III 1996-97 0.21 0.00 4.99 1997-98 0.64 0.00 8.20 1998-99 1.37 0.00 34.78 Pre 1999-2000 2.31 2.28 46.71 ebanking 2000-01 3.49 6.92 64.59 Average 1.60 1.84 31.85 S.D. 1.32 3.01 25.41 C.V. (%) 82.50 163.59 79.78 2001-02 4.14 7.17 69.64 2002-03 5.48 12.56 72.73 2003-04 7.68 13.57 71.21 2004-05 11.52 13.45 56.60 Post 2005-06 15.84 17.80 69.26 ebanking 2006-07 24.91 24.94 82.32 Average 11.60 14.92 70.29 S.D. 7.79 5.97 8.25 C.V. (%) 67.16 40.01 11.74 Combined Average 7.05 8.97 52.82 Avg. Technology Gap 10.00 13.08 38.44 Source: Information collected through IT Dept., IBA Mumbai Period G-IV 9.81 13.89 20.45 22.65 40.71 21.50 11.90 55.35 40.14 45.00 44.24 75.89 46.96 57.31 51.59 13.22 25.63 37.91 30.09 (Per cent) Industry 0.99 1.60 1.87 1.96 3.68 2.02 1.00 49.50 3.88 5.54 7.16 8.49 11.20 25.46 10.29 7.84 76.19 6.53 8.27

3.4.6 Tele-Banking Branches Tele-banking encourages banking on telephones for limited operations. Table 3.21 represents comparative view where average share of tele-banking branches of total branches is more in fully IT-oriented banks in pre-ebanking period and industry do not show even 2 pc average having large variations. Comparatively, post-ebanking period proves slight upgrading where again G-III is at a peek (51.55 pc). Combined average also demonstrates almost 30 pc lesser average of partially IT-oriented banks even industry reports just about 6 pc average an alarming gap of nearly 10 times. Post-ebanking period confirms striking improvement in telebanking services in all bank groups but G-III take an attention as grew by 27.64 pc and industry with just 7.17 pc growth is far behind. The facts describe that partially IT-oriented banks, although prove 6 to 13 pc growth, still not harmonized with fully IT-oriented banks and a major factor is IT, a vigor of these banks but a weak point for others. Overall conclusion drawn from data is that post-ebanking period is an indication of remarkable improvement in 94

tele-banking business in fully IT-oriented banks whereas partially IT-oriented banks, even having much lesser average, still records 6 to 13 pc growth, but not enough to harmonize with later banks. All bank groups show more stabling in post-ebanking period but industry proves higher competition witness by increased variations. It is worth mentioning that IT the most productive apparatus of transformation, is touching the whole business with utmost effect on G-III. Table 3.21
Tele Banking Branches as Percentage of Total Branches Years G-I G-II G-III 1996-97 0.01 0.00 5.77 1997-98 0.33 0.00 9.18 1998-99 0.63 0.00 23.19 Pre 1999-2000 1.26 2.78 42.89 ebanking 2000-01 1.75 5.74 38.28 Average 0.80 1.70 23.86 S.D. 0.70 2.56 16.68 C.V. (%) 87.50 150.59 69.91 2001-02 2.27 8.84 46.26 2002-03 4.05 10.91 65.86 2003-04 5.28 11.44 57.58 2004-05 6.29 13.32 49.75 Post 2005-06 8.24 18.48 41.92 ebanking 2006-07 16.50 22.84 47.93 Average 7.11 14.31 51.55 S.D. 5.03 5.31 8.70 C.V. (%) 70.75 37.11 16.88 Combined Average 4.24 8.58 38.96 Avg. Technology Gap 6.31 12.61 27.69 Source: Information collected through IT Dept., IBA Mumbai Period G-IV 10.71 16.67 27.27 28.18 42.14 24.99 12.07 48.30 45.58 43.89 40.09 63.83 44.53 58.46 49.40 9.44 19.11 38.30 24.41 (Per cent) Industry 0.97 1.62 1.77 1.85 2.14 1.67 0.43 25.75 3.29 3.63 5.48 7.41 10.31 22.93 8.84 7.38 83.48 5.58 7.17

3.4.7 IT Index IT index is a combination of all e-channels which represents the performance of the banks in IT usage. Table 3.22 shows that during pre-ebanking period, fully IT-oriented banks capture a look with more than 50 scores average whereas industry is at down position with 41.36 average because partially IT-oriented banks report below 40 scores average with superior stability. During post-ebanking period, G-IV leads (62.04) through a 2 points more average than G-III whereas industry reports 45 scores average, almost 15 points lesser than fully IToriented banks but incompatible with partially IT-oriented banks. Combined average concludes that partially IT-oriented banks even industry are laggards by 15 points of fully IToriented banks. Post-ebanking period is a testimony of volatile growth in IT usage in whole banking industry with admirable response of G-IV which proves 10 scores rise whereas 95

industry grows by just 4 points. It is important to note that although, partially IT-oriented banks witness smaller average, still confirm impressive improvement but not synchronized with fully IT-oriented banks. The data proves incessant growth in technology usage for banking services as post-ebanking period is steadier. Overall, it is concluded that relatively fully IT-oriented banks are much users of IT and individual e-channels like ATMs and Credit Cards are the most popular channels of G-IV whereas internet, mobile and tele-banking services are more preferred of G-III. It demonstrates that fully IT-oriented banks are more technically sound, strength to manage the current transformation, an outcome of globalization. Hence, IT is the most productive stick to meet the competition and our partially IT-oriented banks also required to be favour for. This is only the way to survive and give strong hand in this competitive environment. Table 3.22
IT Index Years G-I G-II 1996-97 30.29 22.00 1997-98 38.94 38.73 1998-99 40.80 39.05 Pre 1999-2000 41.25 39.98 ebanking 2000-01 42.03 41.34 Average 38.66 36.22 S.D. 4.82 8.01 C.V. (%) 12.47 22.11 2001-02 42.89 42.01 2002-03 43.88 44.31 2003-04 44.75 44.60 2004-05 45.66 45.86 Post 2005-06 46.70 48.08 ebanking 2006-07 48.77 49.11 Average 45.44 45.66 S.D. 2.10 2.61 C.V. (%) 4.62 5.72 Combined Average 42.36 41.37 Avg. Technology Gap 6.78 9.44 Source: Computed from above tables related to IT Period G-III 40.45 46.79 53.48 55.52 57.58 50.83 7.08 13.93 58.61 61.51 60.29 58.44 59.73 62.72 60.22 1.73 2.87 56.04 9.55 G-IV 48.41 49.40 51.62 52.83 57.29 51.91 3.48 6.70 57.69 60.76 59.10 69.60 59.52 65.55 62.04 4.58 7.38 57.43 10.13 Industry 38.29 41.51 41.65 42.14 43.20 41.36 1.84 4.45 43.97 44.39 44.72 45.40 45.96 46.98 45.24 1.11 2.45 43.47 3.88

96

Figure 3.3: Average IT Index

180 160 140
Average Score

120 100 80 60 40 20 0 G-I G-II Comined Average G-III G-IV Industry Post-ebanking Average Pre-ebanking Average

97

3.5 Correlation and Regression Analysis IT has revolutionized the banking business ventured from brick to mortar and record superior performance. IT, along with other factors has remarkably affected all the factors affecting productivity. Concerns that ITs impact on different factors should be evaluated to draw the real picture. In due course, a correlation between e-channels and some selected factors of productivity is analyzed in this part which will enable to pick the most effectual e-channel and what the change is observed in post-ebanking period over pre-ebanking period more particularly in partially IT-oriented banks. 3.5.1 E-Channels and Business per Employee Business per employee of G-I is highly correlated with different e-channels as is evidence from table 3.23. All the independent factors except X3 (credit cards) are significantly and positively correlated with business per employee (Y0) a dependent factor where X5 (mobilebanking) is the most effective one and explains 99.60 pc variations in business per employee during pre-ebanking period. In post-ebanking period also all e-channels have positive and significant correlation with business per employee where also X5 is the most effective one proving 99 pc variations means one Per cent increase in mobile banking services leads 99 pc increases in business per employee. The important point to note that X3, insignificant in preebanking period is significant in latter period. Post-ebanking period is testimony of higher correlation, confirms positive contribution of all e-channels in upgrading of business per employee with utmost effect of mobile-banking. Table 3.23
Correlation Co-efficient Matrix between Business per Employee and E-Channels (G - I)
Period Variables Y0 X1 X2 X3 X4 X5 X6 Y0 X1 X2 X3 X4 X5 X6 Y0 1.00 0.921* 0.941* 0.866 0.991** 0.998** 0.989** 1.00 0.928** 0.965** 0.871* 0.981** 0.995** 0.958** X1 1.00 0.989** 0.969** 0.912* 0.923* 0.914* 1.00 0.830* 0.672 0.926** 0.892* 0.831* X2 1.00 0.972** 0.946* 0.949* 0.952* X3 X4 X5 X6 R2 1.0000 0.8482 0.8855 0.7500 0.9821 0.9960 0.9781 1.0000 0.8612 0.9312 0.7586 0.9624 0.9900 0.9178

Pre ebanking

1.00 0.886* 0.872 0.877

1.00 0.994** 0.995**

1.00 0.996**

1.00

Post ebanking

1.00 0.959** 0.969** 0.984** 0.996**

1.00 0.893* 0.916* 0.968**

1.00 0.982** 0.974**

1.00 0.980**

1.00

Note: ** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed)

98

Independent factors also have positive and significant correlation with each other during both study periods but higher in post-ebanking period confirms efficiency of IT, the most productive tool of transformation. G-II shows poor correlation between e-channels and business per employee although it is positive in pre-ebanking period (Table 3.24). X1 (computerized branches) reports the highest effect explaining 99 pc variations while X2 & X3 confirm insignificant correlation still positive. During post-ebanking period, an excellent improvement is observed because all the variables have positive and significant correlation with business per employee where X4 (Internet-banking) capture a look with the highest correlation and explains 97.02 pc variations. It is worth mentioning that X2 & X3 are affecting the business at higher rates in second period proved by higher variations. Hence, post-ebanking period is the most effective and steady period witnessing the critical management of IT through improved performance with uppermost effect of internet-banking though all e-channels are causing notable variations in business per employee. Independent variables also show higher correlation between each other during post-ebanking period. Table 3.24
Correlation Co-efficient Matrix between Business per Employee and E-Channels (G - II) Variables Y0 X1 X2 Y0 1.00 X1 0.995** 1.00 X2 0.803 0.777 1.00 PreX3 0.858 0.839 0.994** ebanking X4 0.938* 0.915* 0.858 X5 0.898* 0.873 0.968** X6 0.929 0.905* 0.918* Y0 1.00 X1 0.959** 1.00 X2 0.945** 0.821* 1.00 Post X3 0.982** 0.960** 0.903* ebanking X4 0.985** 0.975** 0.885* X5 0.978** 0.900* 0.946** X6 0.981** 0.895* 0.989** Note: ** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) Period X3 X4 X5 X6 R2 1.0000 0.9900 0.6448 0.7362 0.8798 0.8064 0.8630 1.0000 0.9197 0.8930 0.9643 0.9702 0.9565 0.9624

1.00 0.886* 0.978** 0.938*

1.00 0.959** 0.991**

1.00 0.988**

1.00

1.00 0.987** 0.975** 0.949**

1.00 0.968** 0.937**

1.00 0.967**

1.00

G-III shows that all variables have insignificant impact on business per employee though positive where X1 (computerized branches) is not correlated because of constant nature as these banks have 100 pc of their branches computerized from the starting of the business. X6 (tele-banking) records the highest correlation although insignificant during pre-ebanking period. Post-ebanking period discloses adverse consequences where X2 & X5 are negatively 99

correlated with business per employee. Concerns that X6 is relatively more important caused the highest variations in business per employee during the whole study period (Table 3.25). Correlation between independent variables is also insignificant except one or two like X4 with X5 & X6 and X5 with X6 in pre-ebanking period and X3 with X6 and X4 with X5 in latter period having significant correlation. Although, e-channels have no significant correlation with business per employee, but these are affecting each other significantly, where telebanking proves the greater contribution towards enhancing business per employee in comparison of others. Table 3.25
Correlation Co-efficient Matrix between Business per Employee and E-Channels (G - III) Variables Y0 X1 X2 X3 X4 Y0 1.00 X1 a 1.00 X2 0.436 a 1.00 Pre X3 0.173 a 0.850 1.00 ebanking X4 0.316 a 0.438 -0.024 1.00 X5 0.429 a 0.419 -0.052 0.990** X6 0.671 a 0.481 0.069 0.884* Y0 1.00 X1 a 1.00 X2 -0.509 a 1.00 Post X3 0.503 a -0.035 1.00 ebanking X4 0.318 a 0.162 0.754 1.00 X5 -0.070 a 0.531 0.532 0.880* X6 0.711 a -0.336 0.889* 0.443 Note: ** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) a Cannot be computed because at least one of the variables is constant Period X5 X6 R2 1.00 a 0.1901 0.0299 0.0999 0.1840 0.4502 1.00 a 0.2591 0.2530 0.1011 0.0049 0.5055

1.00 0.935*

1.00

1.00 0.097

1.00

G-IV depicts that all variables have significant and positive correlation with business per employee during pre-ebanking period and X2 (ATMs) is highly correlated causing 98.21 pc increase in business per employee with 1 pc more use of ATMs (Table 3.26). During postebanking period, a record is unfavorable since all variables have negative though insignificant correlation with business per employee where X1 (computerized branches) has no correlation because of constant nature of this factor as this group has all its branches computerized from the starting of the business. It is noteworthy that e-channels negate their impact on business per employee during the later period. Independent variables are affecting each other significantly during both the study periods where X4 records the highest correlation with X3 in pre-ebanking period and with X5 in post-ebanking period. All e-channels trim down business per employee though causing below 50 pc variations. 100

Table 3.26
Correlation Co-efficient Matrix between Business per Employee and E-Channels (G - IV) Variables Y0 X1 X2 X3 X4 Y0 1.00 X1 a 1.00 X2 0.991** a 1.00 Pre X3 0.943* a 0.892* 1.00 ebanking X4 0.911* a 0.851 0.995** 1.00 X5 0.973** a 0.942* 0.970** 0.958* X6 0.916* a 0.863 0.981** 0.988** Y0 1.00 X1 a 1.00 X2 -0.534 a 1.00 Post X3 -0.615 a 0.839* 1.00 ebanking X4 -0.584 a 0.852* 0.969** 1.00 X5 -0.657 a 0.907* 0.947** 0.979** X6 -0.461 a 0.784 0.814* 0.932** Note: ** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) a Cannot be computed because at least one of the variables is constant Period X5 X6 R2 1.0000 a 0.9821 0.8892 0.8299 0.9467 0.8391 1.0000 a 0.2852 0.3782 0.3411 0.4316 0.2125

1.00 0.977**

1.00

1.00 0.919**

1.00

All bank groups collectively represent whole banking industry where table 3.27 shows that all the variables except X2 & X6 have significant correlation with business per employee in preebanking period where X4 (internet-banking) is more important because it shows the highest correlation and explains 93.70 pc variations in business per employee. During post-ebanking period, all variables apart from X1 are positively and significantly correlated with business per employee and X6 (tele-banking) confirms the highest correlation. Table 3.27
Correlation Co-efficient Matrix between Business per Employee and E-Channels (Industry) Variables Y0 X1 X2 Y0 1.00 X1 0.952* 1.00 X2 0.751 0.606 1.00 PreX3 0.908* 0.774 0.952* ebanking X4 0.968** 0.866 0.885* X5 0.951* 0.946* 0.781 X6 0.871 0.729 0.975** Y0 1.00 X1 0.765 1.00 X2 0.937** 0.905* 1.00 PostX3 0.881* 0.939** 0.932** ebanking X4 0.896* 0.938** 0.974** X5 0.925** 0.932** 0.977** X6 0.939** 0.905* 0.979** Note: ** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) Period X3 X4 X5 X6 R2 1.0000 0.9063 0.5640 0.8245 0.9370 0.9044 0.7586 1.0000 0.5852 0.8780 0.7762 0.8028 0.8556 0.8817

1.00 0.982** 0.890* 0.996**

1.00 0.923* 0.964**

1.00 0.859

1.00

1.00 0.920** 0.941** 0.922**

1.00 0.996** 0.993**

1.00 0.997**

1.00

101

It is noteworthy that post-ebanking period substantiates greater correlation of X2 & X6 only whereas others witness downturn and among these tele-banking (X6) is the most important factor explaining the highest variations in business per employee i.e. 88.17 pc. Correlation among independent variables itself signifies positive and significant where X6 witnesses the highest correlation with X3 (0.996) in pre-ebanking period and with X5 (0.997) in later period. Post-ebanking period confirms greater correlation and X6 (tele-banking) is the most affected variable causing 88 pc changes in business per employee with 1 pc more use of tele-banking services. Overall, e-channels have positive and significant correlation with business per employee except G-III in pre-ebanking period but in post-ebanking period, only partially IT-oriented banks and industry show higher correlation except for one or two variables whereas fully IToriented banks wipe out the effect of all e-channels. Among all the bank groups, G-I evaluated as the most affected group by each e-channel in pre as well as post-ebanking period and mobile-banking has affected its business at the most. Among all the e-channels, mobile banking affects the most relatively internet-banking, ATMs, computerized branches and telebanking have varied influence whereas credit cards dont have prominent affect. In due course, e-channels are positively contributing towards business per employee of all bank groups and industry with utmost effect on G-I where post-ebanking period is a confirmation to this record. Keeping in mind enduring scrutiny, transformation is pragmatic among almost all the bank groups in post-ebanking period and certainly it can be said that there is a paradigm shift in business per employee. 3.5.2 E-Channels and Establishment Expenditure per Employee Establishment expenditure of G-I is directly associated with IT because advanced use of IT lead rationalization of employees resulting downturn in establishment expenditure. It is evidence from table 3.28 that all the variables are significantly and positively correlated with establishment expenditure in pre-ebanking period where X5 is the most important one explaining the highest correlation and 92.16 pc variations in establishment expenditure whereas credit cards are reporting the least variations. In post-ebanking period, all variables witness negative correlation although insignificant symbolizes more use of IT has abridged the establishment expenditure, a positive contribution towards superior fertility. Correlation between independent variables is significant for both the study periods where X5 is highly correlated with X6 in pre-ebanking period and X2 with X6 in post-ebanking period. On the 102

whole, post-ebanking period confirms higher correlation among independent variables but lower establishment expenditure which demonstrates effective cut back in establishment expenditures because of more use of IT. Table 3.28
Correlation Co-efficient Matrix between Establishment Expenditure per Employee and E-Channels (G - I) Variables Y0 X1 X2 Y0 1.00 X1 0.958* 1.00 X2 0.943* 0.989** 1.00 PreX3 0.891* 0.969** 0.972** ebanking X4 0.943* 0.912* 0.946* X5 0.960** 0.923* 0.949* X6 0.935* 0.914* 0.952* Y0 1.00 X1 -0.082 1.00 X2 -0.463 0.830* 1.00 PostX3 -0.683 0.672 0.959** ebanking X4 -0.378 0.926** 0.969** X5 -0.368 0.892* 0.984** X6 -0.520 0.831* 0.996** Note: **Correlation is significant at the 0.01 level (2-tailed) *Correlation is significant at the 0.05 level (2-tailed) Period X3 X4 X5 X6 R2 1.0000 0.9178 0.8892 0.7939 0.8892 0.9216 0.8742 1.0000 0.0067 0.2144 0.4665 0.1429 0.1354 0.2704

1.00 0.886* 0.872 0.877

1.00 0.994** 0.995**

1.00 0.996**

1.00

1.00 0.893* 0.916* 0.968**

1.00 0.982** 0.974**

1.00 0.980**

1.00

It is seen from table 3.29 that G-II demonstrates positive correlation between e-channels and establishment expenditure per employee where only X1 is significantly correlated in preebanking period. Table 3.29
Correlation Co-efficient Matrix between Establishment Expenditure per Employee and E-Channels (G - II) Period Variables Y0 X1 X2 X3 X4 X5 X6 Y0 X1 X2 X3 X4 X5 X6 Y0 1.00 0.882* 0.450 0.546 0.639 0.559 0.608 1.00 0.871* 0.787 0.945** 0.936** 0.941** 0.834* X1 1.00 0.777 0.839 0.915* 0.873 0.905* 1.00 0.821* 0.960** 0.975** 0.900* 0.895* X2 1.00 0.994** 0.858 0.968** 0.918* 1.00 0.903* 0.885* 0.946** 0.989** X3 X4 X5 X6 R2 1.0000 0.7779 0.2025 0.2981 0.4083 0.3125 0.3697 1.0000 0.7586 0.6194 0.8930 0.8761 0.8855 0.6956

Preebanking

1.00 0.886* 0.978** 0.938*

1.00 0.959** 0.991**

1.00 0.988**

1.00

Postebanking

1.00 0.987** 0.975** 0.949**

1.00 0.968** 0.937**

1.00 0.967**

1.00

103

Comparatively, correlation in post-ebanking period is positive and significant of all variables except X2 where X3 (credit cards) is highly correlated with establishment expenditure per employee. It is important to communicate, although correlation is positive during both time periods but is higher in post-ebanking period. Concerns, more use of IT is mounting the establishment expenditure per employee because of inadequate usage of IT. These banks have either to employee new tech-skilled staff or train the already employed ones to keep away from additional expenditure. Correlation between independent variables is also larger in postebanking period. On the whole, it is concluded that all e-channels except computerized branches caused greater variations in establishment expenditure in post-ebanking period over the first period. It is apparent from table 3.30 that correlation between establishment expenditure per employee and independent variables of G-III is insignificant, moreover positive in preebanking period. Similarly, post-ebanking period also proves insignificant correlation except X2 (ATMs) whereas X6 counteracts its effect. Concerns that post-ebanking period, more prone to IT, records lesser correlation designates that with progressive use of IT, establishment expenditure per employee may trim down if exploit appropriately even though facts report positive impact but insignificant. Among all the variables, X2 witness the highest correlation because with increased number of ATMs per branch, number of employees increase due to the requirement of guard for safety operations on ATM. Table 3.30
Correlation Co-efficient Matrix between Establishment Expenditure per Employee and E-Channels (G - III) Variables Y0 X1 X2 X3 X4 Y0 1.00 X1 a 1.00 X2 0.659 a 1.00 Pre X3 0.583 a 0.850 1.00 ebanking X4 0.624 a 0.438 -0.024 1.00 X5 0.591 a 0.419 -0.052 0.990** X6 0.606 a 0.481 0.069 0.884* Y0 1.00 X1 a 1.00 X2 0.943** a 1.00 Post X3 0.255 a -0.035 1.00 ebanking X4 0.339 a 0.162 0.754 1.00 X5 0.609 a 0.531 0.532 0.880* X6 -0.046 a -0.336 0.889* 0.443 Note: ** Correlation is significant at the 0.01 level (2-tailed) *Correlation is significant at the 0.05 level (2-tailed) a Cannot be computed because at least one of the variables is constant Period X5 X6 R2 1.0000 a 0.4343 0.3399 0.3894 0.3493 0.3672 1.0000 a 0.8892 0.0650 0.1149 0.3709 0.0021

1.00 0.935*

1.00

1.00 0.097

1.00

104

Correlation between independent variables is also insignificant except one or two variables. Overall, all e-channels explain below 50 pc variations where tele-banking is much important because it reports negative impact on establishment expenditure a positive symbol of better performance in second period. Correlation between establishment expenditure per employee and e-channels of G-IV is significant and positive in pre-ebanking period where X3 is affecting the establishment expenditure at the highest explaining 95.84 pc variations. Table 3.31 describes that postebanking period counteracts the effect of all the variables where tele-banking is the most important factor causing highest decline in establishment expenditure, an encouraging symbol of better management of business because enhanced use of IT resulted plunge in establishment expenditure per employee. Correlation between independent variables is also lesser in post-ebanking period although significant. Overall, it may be concluded that foreign banks are flourishing with better management of establishment expenditure through more use of IT in latter period. Table 3.31
Correlation Co-efficient Matrix between Establishment Expenditure per Employee and E-Channels (G - IV) Variables Y0 X1 X2 X3 X4 X5 X6 R2 Y0 1.00 1.0000 X1 a 1.00 a X2 0.916* a 1.00 0.8391 PreX3 0.979** a 0.892* 1.00 0.9584 ebanking X4 0.970** a 0.851 0.995** 1.00 0.9409 X5 0.949* a 0.942* 0.970** 0.958* 1.00 0.9006 X6 0.955* a 0.863 0.981** 0.988** 0.977** 1.00 0.9120 Y0 1.00 1.0000 X1 a 1.00 a X2 -0.451 a 1.00 0.2034 PostX3 -0.071 a 0.839* 1.00 0.0050 ebanking X4 -0.268 a 0.852* 0.969** 1.00 0.0718 X5 -0.382 a 0.907* 0.947** 0.979** 1.00 0.1459 X6 -0.540 a 0.784 0.814* 0.932** 0.919** 1.00 0.2916 Note: **Correlation is significant at the 0.01 level (2-tailed) *Correlation is significant at the 0.05 level (2-tailed) a Cannot be computed because at least one of the variables is constant Period

In case of whole banking industry, all independent variables except X2 & X6 have positive and significant correlation with establishment expenditure per employee and X4 (internet-banking) is highly correlated one explaining 86.68 pc increase in establishment expenditure with 1 pc more use of internet-banking resources in pre-ebanking period but ATMs is important to cause the least increase (50.27 pc) in establishment expenditure (Table 3.32). Post-ebanking

105

period is an authentication of negligible effect of all the variables on establishment expenditure where X1, X3 & X4 negates the effect that confirms positive contribution towards scheming establishment expenditure. Insignificant correlation in post-ebanking period bear out that more and effective use of IT trim down the establishment expenditure, but improper use just opposes the picture. Hence, all the bank groups are recommended to use IT in a complete and efficient approach that will certainly facilitate to control not only establishment expenditure but the whole business. Table 3.32
Correlation Co-efficient Matrix between Establishment Expenditure per Employee and E-Channels (Industry) Variables Y0 X1 X2 X3 Y0 1.00 X1 0.892* 1.00 X2 0.709 0.606 1.00 PreX3 0.886* 0.774 0.952* 1.00 ebanking X4 0.931* 0.866 0.885* 0.982** X5 0.927* 0.946* 0.781 0.890* X6 0.839 0.729 0.975** 0.996** Y0 1.00 X1 -0.206 1.00 X2 0.040 0.905* 1.00 PostX3 -0.029 0.939** 0.932** 1.00 ebanking X4 -0.003 0.938** 0.974** 0.920** X5 0.057 0.932** 0.977** 0.941** X6 0.098 0.905* 0.979** 0.922** Note: ** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) Period X4 X5 X6 R2 1.0000 0.7957 0.5027 0.7850 0.8668 0.8593 0.7039 1.0000 0.0424 0.0016 0.0008 0.0000 0.0032 0.0096

1.00 0.923* 0.964**

1.00 0.859

1.00

1.00 0.996** 0.993**

1.00 0.997**

1.00

On the whole, data is an evidence of better control on establishment expenditure per employee with more use of IT in post-ebanking period. But the depiction is not comparable in all bank groups because G-II is the only bank group records higher and positive correlation in postebanking period a fact of poor management of expenditure and indecent use of IT. Alongside, all other bank groups show negative and insignificant correlation during post-ebanking period although significant in pre-ebanking period where G-I and G-IV steel an attention with more control on expenditure. It is very difficult to establish the most effective e-channel still telebanking is the most important channel which has diminished its effect on establishment expenditure in most of the bank groups. Hence, post-ebanking period is steadier through striking effect of e-channels to control establishment expenditure with utmost effect of telebanking along with credit cards especially on G-I & IV. Establishment expenditure is the most important part of total expenditure, so require total concentration to control because IT has confirmed the best apparatus to manage transformation effect as G-I & IV are the true 106

witness. So, it is require that old private sector banks (G-II) have also come on the track to concentrate fully on electronic banking which will be fruitful to make it competitive against all other bank groups. It is very important to note that IT along with other factors is the most productive tool of transformation and managing different facets of banking business. 3.5.3 E-Channels and Business per Branch Correlation matrix in table 3.33 demonstrates that all variables are positively and significantly correlated with business per branch of G-I in pre-ebanking period and X5 (mobile-banking) is highly correlated affecting business per branch by 99.40 pc with 1 pc more use of mobilebanking services. Post-ebanking period confirms lesser correlation although positive and significant where also X5 (mobile-banking) is the most important variable explaining 99.60 pc variations. Positive and significant correlation is observed between independent variables also. Post-ebanking period, although have a good amount of correlation, proves lesser effect of e-channels on per branch business except mobile-banking reporting larger effect. Therefore, all bank groups should avail all ebanking techniques to cope up with fully IToriented banks. Table 3.33
Correlation Co-efficient Matrix between Business per Branch and E-Channels (G - I) Period Variables Y0 X1 X2 X3 X4 X5 X6 Y0 X1 X2 X3 X4 X5 X6 Y0 1.00 0.949* 0.971** 0.908* 0.992** 0.997** 0.994** 1.00 0.946** 0.950** 0.884* 0.978** 0.988** 0.943** X1 1.00 0.989** 0.969** 0.912* 0.923* 0.914* 1.00 0.830* 0.672 0.926** 0.892* 0.831* X2 1.00 0.972** 0.946* 0.949* 0.952* 1.00 0.959** 0.969** 0.984** 0.996** X3 X4 X5 X6 R2 1.0000 0.9006 0.9428 0.8245 0.9841 0.9940 0.9880 1.0000 0.8949 0.9025 0.7815 0.9565 0.9960 0.8892

Preebanking

1.00 0.886* 0.872 0.877

1.00 0.994** 0.995**

1.00 0.996**

1.00

Postebanking

1.00 0.893* 0.916* 0.968**

1.00 0.982** 0.974**

1.00 0.980**

1.00

G-II proves positive and significant correlation between e-channels except X2 & X3 and business per branch and X1 records the highest correlation and hence causing 97.61 pc variations during pre-ebanking period (Table 3.34). Comparatively post-ebanking period envisages much higher correlation with utmost effect of X4 explaining 98.80 pc variations. Correlation between independent variables is also significant where X2 proves the highest

107

correlation with other variables particularly X3 & X6 respectively in pre and post-ebanking period. Overall, post-ebanking period confirms positive and greater impact of all e-channels on business per branch with utmost effect of internet-banking. Table 3.34
Correlation Co-efficient Matrix between Business per Branch and E-Channels (G - II) Variables Y0 X1 X2 X3 X4 X5 X6 R2 Y0 1.00 1.0000 X1 0.988** 1.00 0.9761 X2 0.817 0.777 1.00 0.6675 PreX3 0.868 0.839 0.994** 1.00 0.7534 ebanking X4 0.934* 0.915* 0.858 0.886* 1.00 0.8724 X5 0.905* 0.873 0.968** 0.978** 0.959** 1.00 0.8190 X6 0.930* 0.905* 0.918* 0.938* 0.991** 0.988** 1.00 0.8649 Y0 1.00 1.0000 X1 0.963** 1.00 0.9274 X2 0.928** 0.821* 1.00 0.8612 PostX3 0.991** 0.960** 0.903* 1.00 0.9821 ebanking X4 0.994** 0.975** 0.885* 0.987** 1.00 0.9880 X5 0.982** 0.900* 0.946** 0.975** 0.968** 1.00 0.9643 X6 0.968** 0.895* 0.989** 0.949** 0.937** 0.967** 1.00 0.9370 Note: **Correlation is significant at the 0.01 level (2-tailed) *Correlation is significant at the 0.05 level (2-tailed) Period

From table 3.35, negative correlation of all e-channels except X5 & X6 with business per branch of G-III is observed in pre-ebanking period though it is insignificant. Correspondingly in post-ebanking period, only X2 (ATMs) proves significant and positive correlation and explains 74.48 pc variations in business per branch means one percent increase in ATMs use lead 74 pc growth of business per branch. Table 3.35
Correlation Co-efficient Matrix between Business per Branch and E-Channels (G - III) Variables Y0 X1 X2 X3 X4 X5 Y0 1.00 X1 a 1.00 X2 -0.037 a 1.00 Pre X3 -0.271 a 0.850 1.00 ebanking X4 -0.055 a 0.438 -0.024 1.00 X5 0.044 a 0.419 -0.052 0.990** 1.00 X6 0.178 a 0.481 0.069 0.884* 0.935* Y0 1.00 X1 a 1.00 X2 0.863* a 1.00 Post X3 -0.121 a -0.035 1.00 ebanking X4 0.211 a 0.162 0.754 1.00 X5 0.439 a 0.531 0.532 0.880* 1.00 X6 -0.358 a -0.336 0.889* 0.443 0.097 Note: ** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) a Cannot be computed because at least one of the variables is constant Period X6 R2 1.0000 a 0.0014 0.0734 0.0030 0.0019 0.0317 1.0000 a 0.7448 0.0146 0.0445 0.1927 0.1282

1.00

1.00

108

G-III represents diverse image where only ATMs has improved business per branch highly but internet-banking too proves improvement of per branch business from decrease in preebanking period to increase in post-ebanking. Independent variables also witness insignificant correlation with each other apart from one or two. Consequently, post-ebanking period witness slight change since this group has started its business with full computerization and favoring ebanking system totally and contributing to enhanced performance from the last decades and secondly banks have excessive credits though in progress to control and essentially these are still in establishment stage. Correlation matrix in table 3.36 shows that all the variables have positive and significant correlation with business per branch of G-IV in pre-ebanking period where X5 (mobilebanking) proves the most effective one causing 97.42 pc growth of business per branch with the one Per cent more use of mobile-banking services. Comparatively, in post-ebanking period, all the variables witness positive correlation but only few variables have significant and X6 (tele-banking) proves the highest correlation so is important to enhance business per branch by 92.35 pc with more use of tele-banking services. It is essential to note that all variables have smaller correlation with business per branch in post-ebanking period with utmost effect of tele-banking. Correlation between independent variables is also positive and significant but lowers where X4 is highly affecting the other variables more particularly X3 & X5. Table 3.36
Correlation Co-efficient Matrix between Business per Branch and E-Channels (G - IV) Variables Y0 X1 X2 X3 X4 Y0 1.00 X1 a 1.00 X2 0.981** a 1.00 PreX3 0.935* a 0.892* 1.00 ebanking X4 0.909* a 0.851 0.995** 1.00 X5 0.987** a 0.942* 0.970** 0.958* X6 0.933* a 0.863 0.981** 0.988** Y0 1.00 X1 a 1.00 X2 0.697 a 1.00 PostX3 0.790 a 0.839* 1.00 ebanking X4 0.898* a 0.852* 0.969** 1.00 X5 0.898* a 0.907* 0.947** 0.979** X6 0.961** a 0.784 0.814* 0.932** Note: ** Correlation is significant at the 0.01 level (2-tailed) *Correlation is significant at the 0.05 level (2-tailed) a Cannot be computed because at least one of the variables is constant Period X5 X6 R2 1.0000 a 0.9624 0.8742 0.8263 0.9742 0.8705 1.0000 a 0.4858 0.6241 0.8064 0.8064 0.9235

1.00 0.977**

1.00

1.00 0.919**

1.00

109

This bank group has also all its branches computerized moreover ventured into ebanking system and take a lead during pre-ebanking period so record a minor change. All e-channels have caused lesser variations in business per branch in post-ebanking period whereas one and the only channel; tele-banking proves higher variations i.e. 92.35 pc. It is evidence from table 3.37 that industry shows positive and significant correlation between business per branch and e-channels except ATMs in pre-ebanking period where, X4 (internetbanking) proves the highest correlation and causing 95.65 pc variations in business per branch. Post-ebanking period embodies little bit different trace where only three variables X2, X5 & X6 have greater correlation in this period in comparison of first period and X6 is highly affecting (87.80 pc) the business per branch. It is worth mentioning that computerized branches, affecting business per branch significantly in pre-ebanking period, trim down its impact in post-ebanking period however computerized branches are rising at an escalating trend. Independent variables also explain assorted outcome as if some variables have greater correlation in pre-ebanking period then others have in post-ebanking period. Tele-banking has greater correlation with other variables and also with business per branch of the industry although ATMs and mobile-banking explain greater variations in the second period. Table 3.37
Correlation Co-efficient Matrix between Business per Branch and E-Channels (Industry) Variables Y0 X1 X2 X3 Y0 1.00 X1 0.920* 1.00 X2 0.770 0.606 1.00 PreX3 0.923* 0.774 0.952* 1.00 ebanking X4 0.978** 0.866 0.885* 0.982** X5 0.921* 0.946* 0.781 0.890* X6 0.889* 0.729 0.975** 0.996** Y0 1.00 X1 0.763 1.00 X2 0.936** 0.905* 1.00 PostX3 0.881* 0.939** 0.932** 1.00 ebanking X4 0.894* 0.938** 0.974** 0.920** X5 0.924** 0.932** 0.977** 0.941** X6 0.937** 0.905* 0.979** 0.922** Note: ** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) Period X4 X5 X6 R2 1.0000 0.8464 0.5929 0.8519 0.9565 0.8482 0.7903 1.0000 0.5822 0.8761 0.7762 0.7992 0.8538 0.8780

1.00 0.923* 0.964**

1.00 0.859

1.00

1.00 0.996** 0.993**

1.00 0.997**

1.00

Overall, business per branch of the entire banking industry excluding G-II is not as much exaggerated by all the e-channels as the business per employee is. Correlation is smaller in post-ebanking period in all bank groups and industry where only a small number of echannels like ATMs, mobile-banking and tele-banking has larger correlation in G-III and 110

industry but G-II is the only group having greater correlation during post-ebanking period. Amongst all the echannles, mobile-banking has affected the business per branch at the most in pre-ebanking period, whereas in post-ebanking period, tele-banking has greater impact on business per branch as mobile, internet-banking and ATMs are in succession. It is worth mentioning that e-channels dont have straight impact on branch business but in combination of other factors of transformation, IT can greatly improve the branch productivity as telebanking has established. Fully IT-oriented banks report much lesser impact of e-channels on their business per branch primarily because of their previously higher performance from last decade and secondly over credits in contrast of lesser branches along with establishing new branches. 3.5.4 E-Channels and Establishment Expenditure per Branch It is apparent from table 3.38 that all the variables except X3 are positively and significantly correlated with establishment expenditure per branch of G-I where X5 (mobile-banking) is highly correlated in pre-ebanking period and explaining 97.42 pc variations in establishment expenditure per branch. During post-ebanking period, all variables wipe out their effect that confirms more use of IT leads plunge in establishment expenditure. Independent variables are significantly correlated with each other where X6 (tele-banking) proves the highest correlation with X5 in pre-ebanking period and with X2 in post-ebanking period. Eventually, postebanking period confirms more contribution of all e-channels to control establishment expenditure. Table 3.38
Correlation Co-efficient Matrix between Establishment Expenditure per Branch and E-Channels (G - I) Variables Y0 X1 X2 Y0 1.00 X1 0.896* 1.00 X2 0.912* 0.989** 1.00 PreX3 0.841 0.969** 0.972** ebanking X4 0.984** 0.912* 0.946* X5 0.987** 0.923* 0.949* X6 0.973** 0.914* 0.952* Y0 1.00 X1 0.109 1.00 X2 -0.436 0.830* 1.00 PostX3 -0.654 0.672 0.959** ebanking X4 -0.257 0.926** 0.969** X5 -0.304 0.892* 0.984** X6 -0.455 0.831* 0.996** Note: ** Correlation is significant at the 0.01 level (2-tailed) *Correlation is significant at the 0.05 level (2-tailed) Period X3 X4 X5 X6 R2 1.0000 0.8028 0.8317 0.7073 0.9683 0.9742 0.9467 1.0000 0.0119 0.1901 0.4277 0.0660 0.0924 0.2070

1.00 0.886* 0.872 0.877

1.00 0.994** 0.995**

1.00 0.996**

1.00

1.00 0.893* 0.916* 0.968**

1.00 0.982** 0.974**

1.00 0.980**

1.00

111

Correlation matrix in table 3.39 explains that only X1 (computerized branches) has significant correlation causing 93.32 pc variations in establishment expenditure per branch of G-II, although all variables are positively correlated in pre-ebanking period. Relatively in postebanking period, all variables have positive and significant correlation that indicates mounting usage of IT leads increase in establishment expenditure per branch, not a good sign just because of improper use of IT. X4 is the most important variable having highest correlation and causing 82.81 pc changes in establishment expenditure per branch. It is important to note that post-ebanking period is testimony of greater correlation proving inadequate control on expenditure and mismanagement of IT infrastructure, which is adversely affecting establishment expenditure. Independent variables also show higher correlation with each other during the later period. Hence, it is concluded that G-II has adverse effect of e-channels during whole study period with utmost effect of internet-banking. Table 3.39
Correlation Co-efficient Matrix between Establishment Expenditure per Branch and E-Channels (G - II) Variables Y0 X1 X2 Y0 1.00 X1 0.966** 1.00 X2 0.658 0.777 1.00 PreX3 0.726 0.839 0.994** ebanking X4 0.861 0.915* 0.858 X5 0.781 0.873 0.968** X6 0.833 0.905* 0.918* Y0 1.00 X1 0.843* 1.00 X2 0.829* 0.821* 1.00 PostX3 0.871* 0.960** 0.903* ebanking X4 0.910* 0.975** 0.885* X5 0.883* 0.900* 0.946** X6 0.850* 0.895* 0.989** Note: ** Correlation is significant at the 0.01 level (2-tailed) *Correlation is significant at the 0.05 level (2-tailed) Period X3 X4 X5 X6 R2 1.0000 0.9332 0.4330 0.5271 0.7413 0.6100 0.6939 1.0000 0.7106 0.6872 0.7586 0.8281 0.7797 0.7225

1.00 0.886* 0.978** 0.938*

1.00 0.959** 0.991**

1.00 0.988**

1.00

1.00 0.987** 0.975** 0.949**

1.00 0.968** 0.937**

1.00 0.967**

1.00

Table 3.40 discloses negative but insignificant correlation in pre-ebanking period whereas post-ebanking period witnesses positive correlation but insignificant between establishment expenditure per branch of G-III and all e-channels except X6 (tele-banking) proves. Note that X2 (ATMs) reports higher correlation means 1 pc increase in ATMs boost up the establishment expenditure per branch by 96.24 pc because of requirement of number of guards for the security of extra installed ATMs. Correlation between independent variables is also positive but insignificant except X4 has significant correlation with X5. Consequently, it is

112

drawn from the facts that post-ebanking period confirms more impact of all e-channels on establishment expenditure per branch with utmost effect of ATMs. Table 3.40
Correlation Co-efficient Matrix between Establishment Expenditure per Branch and E-Channels (G - III) Variables Y0 X1 X2 X3 X4 Y0 1.00 X1 a 1.00 X2 -0.177 a 1.00 PreX3 -0.325 a 0.850 1.00 ebanking X4 -0.161 a 0.438 -0.024 1.00 X5 -0.039 a 0.419 -0.052 0.990** X6 0.159 a 0.481 0.069 0.884* Y0 1.00 X1 a 1.00 X2 0.981** a 1.00 PostX3 0.118 a -0.035 1.00 ebanking X4 0.326 a 0.162 0.754 1.00 X5 0.657 a 0.531 0.532 0.880* X6 -0.228 a -0.336 0.889* 0.443 Note: ** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) a Cannot be computed because at least one of the variables is constant Period X5 X6 R2 1.0000 a 0.0313 0.1056 0.0259 0.0015 0.0253 1.0000 a 0.9624 0.0139 0.1063 0.4316 0.0520

1.00 0.935*

1.00

1.00 0.097

1.00

G-IV explains that all the variables except X2 are positively and significantly correlated with establishment expenditure per branch with the utmost effect of X4 (internet-banking) proving 95.26 pc increase in establishment expenditure due to one percent increase in its usage during pre-ebanking period, whereas post-ebanking period confirms lesser correlation though positive. Table 3.41
Correlation Co-efficient Matrix between Establishment Expenditure per Branch and E-Channels (G - IV) Variables Y0 X1 X2 X3 X4 X5 X6 R2 Y0 1.00 1.0000 X1 a 1.00 a X2 0.874 a 1.00 0.7639 Pre X3 0.973** a 0.892* 1.00 0.9467 ebanking X4 0.976** a 0.851 0.995** 1.00 0.9526 X5 0.939* a 0.942* 0.970** 0.958* 1.00 0.8817 X6 0.967** a 0.863 0.981** 0.988** 0.977** 1.00 0.9351 Y0 1.00 1.0000 X1 a 1.00 a X2 0.090 a 1.00 0.0081 Post X3 0.593 a 0.839* 1.00 0.3516 ebanking X4 0.452 a 0.852* 0.969** 1.00 0.2043 X5 0.349 a 0.907* 0.947** 0.979** 1.00 0.1218 X6 0.187 a 0.784 0.814* 0.932** 0.919** 1.00 0.0350 Note: **Correlation is significant at the 0.01 level (2-tailed) *Correlation is significant at the 0.05 level (2-tailed) a Cannot be computed because at least one of the variables is constant Period

113

Note that e-channels, boosting up the establishment expenditure at the highest in pre-ebanking period, have trim down their impact in post-ebanking period (Table 3.41). Correlation between independent variables is also lesser in the later period. It is obvious that G-IV has also succeeded in making e-channels less effective to increase establishment expenditure. Although correlation is positive means with the increase in IT usage expenditure will rise but not to such an extent as in pre-ebanking period. Industry (Table 3.42) shows positive and significant correlation between establishment expenditure and all e-channels except X2 & X6 in pre-ebanking period which proves that an increased use of mobile-banking services leads 93.32 pc increase in establishment expenditure. Comparatively post-ebanking period shows insignificant correlation though positive means more use of IT will not enhance the establishment expenditure to a large extent because all e-channels apart from one or two, counteracts the correlation in this period. Independent variables also confirm lesser correlation with each other in post-ebanking period. Therefore, post-ebanking period is a momentum for the progressive use of e-channels because these channels help out to balance the establishment expenditure. Table 3.42
Correlation Co-efficient Matrix between Establishment Expenditure per Branch and E-Channels (Industry) Period Variables Y0 X1 X2 X3 X4 X5 X6 Y0 X1 X2 X3 X4 X5 X6 Y0 1.00 0.952* 0.751 0.908* 0.962** 0.966** 0.868 1.00 -0.264 0.037 0.040 -0.117 -0.041 -0.007 X1 1.00 0.606 0.774 0.866 0.946* 0.729 1.00 0.905* 0.939** 0.938** 0.932** 0.905* X2 1.00 0.952* 0.885* 0.781 0.975** 1.00 0.932** 0.974** 0.977** 0.979** X3 X4 X5 X6 R2 1.0000 0.9063 0.5640 0.8245 0.9254 0.9332 0.7534 1.0000 0.0697 0.0014 0.0016 0.0137 0.0017 0.0000

Preebanking

1.00 0.982** 0.890* 0.996**

1.00 0.923* 0.964**

1.00 0.859

1.00

Postebanking

1.00 0.920** 0.941** 0.922**

1.00 0.996** 0.993**

1.00 0.997**

1.00

In general, all bank groups except G-III confirm positive correlation and G-I records significant and higher effect of all e-channels in pre-ebanking period but in later period, negative or insignificant correlation is observed in all bank groups even industry but G-II is the only group with greater positive correlation. Among all the e-channels, internet banking has really been enhanced the establishment expenditure during pre-banking period mainly due

114

to its establishing stage whereas it has reduced the expenditure during post-ebanking period. In due course, these e-channels have rationalized their impact in post-ebanking period. Largely, industry shows fine outcome where all e-channels have fruitfully assisted the bank groups to manage establishment expenditure negative correlation proves the matter. Thus, progressive above all adequate usage of IT, a most productive stick of transformation, leads better control on establishment expenditure and hence, inspires the banks to concentrate more on electronic banking, one and the only survival factor of todays banking. 3.5.5 IT Index and Employee Productivity Index Employee productivity index is a combination of different factors (D/E, C/E, BUS/E, TE/E, TI/E, ESTB/E & S/E) and IT index is a combination of all e-channels (CB/TB, ATM/TB, CC/TB, IB/TB, MB/TB & TELEB/TB). Table 3.43 shows that correlation between both the variables is positive in all bank groups but significant in case of G-I, IV and industry where G-IV is at the top with the highest correlation in pre-ebanking period explaining 98.21 pc increase in employee productivity due to one Per cent increase in IT usage but it is the lowest in case of G-III. During post-ebanking period, IT has boost up its effect on employee productivity in partially IT-oriented banks as well as industry but fully IT-oriented banks have affected not to such an extent because these banks are at saturation stage of IT usage and hence already gained all the benefits and till continue whereas partially IT-oriented banks are in developing stage and earning the benefits gradually. Industry is at the top proving with the highest variations i.e. 97 pc in employee productivity during post-ebanking period. Overall, G-I and industry demonstrate greater impact of IT usage on employee productivity and postebanking period is an evidence for the same whereas fully IT-oriented banks describes a little special as IT is not only the single factor to effect the productivity but some other factors of transformation like better HRM, better work culture, structure etc. play major role to improve the productivity. Table 3.43
Correlation Co-efficient between Employee Productivity Index and IT Index Variables G-I r R2 G-II r R2 G-III R R2 G-IV r 0.991** -0.132 R2 Industry r 0.981** 0.986** R2

Pre0.885* 0.7832 0.858 0.7362 0.754 0.5685 ebanking Post0.980** 0.9604 0.961** 0.9235 0.646 0.4173 ebanking Note: ** (r) Correlation is significant at the 0.01 level (2-tailed) * (r) Correlation is significant at the 0.05 level (2-tailed)

0.9821 0.0174

0.9624 0.9722

115

Figure 3.4: Correlation between Employee Productivity and IT Index

1.2 1 0.8 0.6 0.4 0.2 0 0.2 G-I G-II Pre-ebanking G-III G-IV Post-ebanking Industry

Figure 3.5: Correlation between Branch Productivity and IT Index

1.2 1 0.8 0.6 0.4 0.2 0 G-I G-II G-III Pre-ebanking G-IV Post-ebanking Industry

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3.5.6 IT Index and Branch Productivity Index Branch productivity index, a combination of different factors (D/B, C/B, BUS/B, TE/B, TI/B, and ESTB/B & S/B) and IT index are positively and significantly correlated in all bank groups and industry where G-II has the highest impact almost 100 pc in pre-ebanking period. Table 3.44 portrays a picture where, only G-I, IV and industry proves significant correlation in post-ebanking period, but it is weakening in case of other bank groups. G-I take an attention gaining the most by IT usage during the whole study period which shows 99 pc impact of IT on its branch productivity which proves that only 1 pc increase in IT usage leads 99 pc increase in branch productivity. G-II shows poor correlation mainly attributable to indecent management of IT. Overall, post-ebanking period confirms greater impact of IT in managing banking business of the industry with utmost effect on G-I. Hypothesis is rejected in case of G-I, IV and industry because IT is significantly affecting the branch productivity of these bank groups whereas not so in case of G-II & III, hence accepted the hypothesis. It is worth mentioning that IT on its own has more than 50 pc impact on improving the branch productivity and other factors play the role for remaining effect. IT along with other factors is an artifact of transformation that escorts the banks at the competitive rim and also enables these banks to compete robustly with the other players in national as well as international market. Table 3.44
Correlation Co-efficient between Index Branch Productivity and IT Index Variables G-I r R2 G-II r R2 G-III R R2 G-IV r 0.997** 0.822* R2 Industry r 0.960** 0.976** R2

Pre0.988** 0.9761 0.999** 0.9980 0.899* 0.8082 ebanking Post0.995** 0.9900 0.762 0.5806 0.811 0.6577 ebanking Note: ** (r) Correlation is significant at the 0.01 level (2-tailed) * (r) Correlation is significant at the 0.05 level (2-tailed)

0.9940 0.6757

0.9216 0.9526

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In general, it can be concluded that employee and branch productivity prove admirable growth through escalating trend in post-ebanking period in all bank groups where G-IV steal a look by means of greater productivity. Post-ebanking period records superior productivity and confirms that progressive use of IT leads good quality outcome. Correlation coefficient also describes larger even positive between IT and productivity in case of G-I and industry but the lowest in case of G-III. Fully IT-oriented banks already had a robust automated banking environment, substantiates better productivity through the whole study period. E-channels are positively contributing at an exciting rate to productivity of all the bank groups especially G-I. Hence, it is proved that IT is the most productive stick of bank transformation managing the whole business efficiently where enhanced productivity is the end result with utmost effect of tele-banking more particularly on G-I. 3.6 Overall Impact of E-Channels on Productivity 3.6.1 Effect of E-Channels on Productivity Ratios In the on going analysis, it is concluded that the post-ebanking period having more effect of echannels on productivity, but it is not clear that which echannel is the most effectual one and which bank group is more effective. In the following part, it is tried to answer these questions through ranking which is based on co-efficient of determination. Table 3.45 portrays a clear picture which shows that the business per employee is most affected by X4 (internet-banking) while mobile-banking is in succession. Only X3 (credit cards) and X4 have increased the effect on productivity in post-ebanking period while all other e-channels even IT-Index have downturn in the effect on business per employee. Establishment expenditure per employee is affected the most by X3 while X2 (ATMs) and X5 (mobile-banking) are in succession. But only X3 and X5 show upward change in ranking while all other e-channels lost the ranks and X6 (tele-banking) doesnt show any change in its rank position. It is important to note that internet-banking has lost 4 ranks as it was at 5th rank in the postebanking period. Business per branch shows different picture where X5 have same effect in both study periods but X2 and X4 are the only e-channels have scored higher ranks while others lost. Mobile-banking is the most effectual echannel during both study periods. Establishment expenditure per branch is affected at the most by X3 in post- ebanking period where X4 was the most effectual e-channel in pre-ebanking period.

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Table 3.45
Impact of E-Channels on Productivity of Banking Industry - Change in Ranking Echannels X1 X2 X3 X4 X5 X6 Business per Employee Extent of Pre* Post** Change 5 3.5 4 3.5 1 2 6 5 3.5 1 2 3.5 -1 -1.5 +0.5 +2.5 -1 -1.5 Establishment Exp. Per Employee Extent of Pre* Post** Change 5.5 2 5.5 1 3 4 6 2.5 1 5 2.5 4 -0.5 -0.5 +4.5 -4 +0.5 0 Business per Branch Extent of Pre* Post** Change 6 5 4 3 1 2 6 4 5 2 1 3 0 +1 -1 +1 0 -1 Establishment Exp. Per Branch Extent of Pre* Post** Change 0 6 6 5 3.5 1 3.5 2 5 1 2.5 2.5 4 0 +2.5 -1.5 +1 -2

Note: +symbol denotes upward change, (-) symbol downward change in ranking for e-channels impact on productivity * Pre-ebanking Period, ** Post-ebanking Period

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X1 (computerized branches) and X2 have no change in the ranking position, X3 and X5 scored higher ranks while others become poor in effecting the branch establishment expenditure. It is important to note that computerized branches is taken as one of the e-channels effecting the productivity and this e-channel shows the lowest rank position in all cases, it so mainly because fully IT-oriented banks have their all branches computerized and its impact on productivity couldnt calculated and hence no rank is marked to computerized branches in case of fully IT-oriented banks. Overall, it is concluded that credit cards show higher improvement in its effect on productivity while internet-banking and mobile-banking follow but ATMs and tele-banking prove downturn. Among all the e-channels, mobile-banking has strong effect on productivity and internet-banking is the second ranked e-channel in this context. 3.6.2 Impact of E-Channels on Productivity in Pre-ebanking Period and Post-ebanking Period Table 3.46 shows the bank group wise ranking on the basis of all four factors of productivity selected to study the impact of e-channels. G-I shows that X4 is the most effected e-channel in post-ebanking period while it was the computerized branches affected the most during preebanking period, but lost 4 ranks and comes at 5th rank in the second period. Credit cards have contributed much and come at 2nd rank. Productivity of G-II is affected by mobile-banking at the most during the both study periods. Only X1 and X4 have lost their ranks while all other e-channels show improvement in their effect on productivity. Credits card is the least effected e-channel as compare to that in G-I. G-III shows ATMs as the most affected e-banking during both study periods where mobilebanking is in succession which has gained 3 ranks from 5th to 2nd rank during the study period. All other e-channels except X2 and X5 lost their ranks. G-IV shows little bit different picture, where X3 is the most effected e-channel in preebanking period while X2, X4 and X5 have similar effect and got same ranks. During postebanking period, X4 is the most effected e-channel which has gained 2 ranks in comparison to the first study period while X5 and X6 are in succession only X2 and X3 show downturn. At Industry level, X4 is the most effected e-channel as X5 follows in the pre-ebanking period while X6 is the most effected e-channel in post-ebanking period as gained 4 ranks but mobilebanking is still at the second rank. Here, it is important to note that X4 has lost 4 ranks contrary to this X2 gained 3 ranks during the post-ebanking period.

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Table 3.46
Impact of E-Channels on Productivity of Bank Groups- Change in Ranking Echannels X1 X2 X3 X4 X5 X6 G-I Pre* 1 6 5 2 4 3 Post** 5 6 2 1 3 4 Extent of Change -4 0 +3 +1 +1 -1 Pre* 5 3 6 2 1 4 G-II Post** 6 2 5 3.5 1 3.5 Extent of Change -1 +1 +1 -1.5 0 +0.5 Pre* 1.5 3.5 3.5 5 1.5 G-III Post** 1 5 4 2 3 Extent of Change +0.5 -1.5 -0.5 +3 -1.5 Pre* 3 1 3 3 5 G-IV Post** 5 4 1 2 3 Extent of Change -2 -3 +2 +1 +2 Pre* 3 6 4 1 2 5 Industry Post** 4 3 6 5 2 1 Extent of Change -1 +3 -2 -4 0 +4

Note: +symbol denotes upward change, (-) symbol downward change in ranking for e-channels impact on productivity * Pre-ebanking Period, ** Post-ebanking Period

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In general, it is clear that tele-banking is affecting the productivity of whole banking industry at the most while mobile-banking is at the second rank. A credit card is the least effected echannel. Among the bank groups, the picture is different if one e-channel is the most affected one in bank group, the same is the least affected in another bank group. Overall, mobilebanking has strong effect on almost all banks productivity while internet-banking and telebanking are following with the successive ranks and other e-channels show poor impact. On the basis of e-channels, X4 is affecting G-I & IV at the most, X2 is affecting G-III, X5 to G-II and X6 to industry though have the least effect in other bank groups. X4 and X5 have excellent impact on productivity of all bank groups. Among the bank groups, G-I is affected at the most by number of e-channels. X1 has the least effect in case of all the four factors of productivity whereas X3 is affecting establishment expenditure per employee and per branch at the most. X4 has a good impact on business per employee and other factors also whereas X5 is affecting strongly to business per branch. Overall, mobile-banking has strong impact on productivity of Indian banking industry and other e-channels are also contributing significant amount. 3.6.3 Impact of E-Channels on Productivity at Bank Group Level Table 3.47 depicts that X1 (computerized branches) is affecting all the four factors of productivity positively in all bank groups except industry but its effect is decreased in postebanking period as compared to the first period and only G-I is having increased effect of computerized branches. In case of ATMs (X2), G-II and G-III have increased effect in all four productivity factors where G-III shows negative effect on business per employee, G-IV proves decrease in ATMs effect on all four factors even negative in case of employee productivity factors. G-I shows negative and increased effect on business per employee whereas it is decreased in case of other factors. Industry shows increased effect on business factors while decreased effect on establishment expenditure. It is important to note that though ATMs have decreased its impact on establishment expenditure, still shows negative which means increased used of ATMs leads decrease in establishment expenditure, a positive sign of input towards transformation management. G-II is the only group proves increase in the impact of X3 (credit cards) impact on all factors of productivity. In case of G-I & III, the effect is increased on business per employee only but

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other factors prove decreased effect of credit cards, but in case of G-IV and industry, credit cards still have positive impact on branch productivity factors only. X4 (internet-banking) has improved effect on all productivity factors in case of only G-II & III. All other bank groups even industry show decrease in the effect of X4 on productivity though it is positive in business per employee and per branch but negative in case of other factors. It means internet-banking helps to reduce establishment expenditure but improve business on the other hand. Table 3.47
Effect of E-Channels on Productivity- Classification of Banking Industry Business per Employee
Increase Decrease

EChannels

Establishment Expenditure per Employee

Increase Decrease

Business per Branch

Increase Decrease

Establishment Expenditure per Branch

Increase Decrease

(+) X1 G-I G-I G-II G-III (-) Industry G-I G-II G-III G-II G-III

(-) G-II Industry G-IV (-)

(+)

(-) G-I (-) G-II Industry (-) G-I (-) G-IV (-) Industry G-I (-) G-III G-IV (-) Industry (-) G-I (-) G-III G-IV (-) Industry (-) G-I (-) G-IV (-) Industry G-I (-) G-III (-) G-IV (-) Industry

(+)

(-) G-I G-II Industry G-I G-IV G-I G-III (-) G-IV Industry G-I G-IV Industry G-IV

(+)

(-) G-I G-II Industry (-) G-I (-) G-IV Industry G-I (-) G-III G-IV Industry G-I (-) G-IV Industry (-) G-I (-) G-IV Industry (-) G-I (-) G-IV Industry (-)

X2

G-II G-III

G-II G-III Industry G-II

G-II G-III

X3

G-IV (-) Industry G-I G-IV (-) Industry G-I G-III (-) G-IV (-) Industry G-I G-IV (-)

G-II

G-II

X4

G-II

G-II G-III G-I G-II G-III Industry G-II G-III (-) G-IV Industry

G-II G-III G-II G-III G-II G-III

X5

G-II G-II G-III Industry

G-II G-III

X6

G-II

G-I

Note: (-) symbol denotes the negative effect

G-II has increased impact of mobile banking (X5) on its productivity and business per branch is the only factor which has a positive impact of mobile banking in case of and all bank groups except G-IV even industry. In case of establishment expenditure both per employee and per branch, the effect is decreased even negative in some banks groups. It is increased in case of G-III means its establishment expenditure increases with more use of mobile banking services. 123

Similarly, tele-banking (X6) also has increased its effect on productivity of G-II only and it is same in case of G-III also except establishment expenditure per employee. Contrary to this, G-I is the only bank group which has decreased effect of tele-banking on productivity factors whereas G-IV and industry shows increased effect of tele-banking on business whereas decreased in case of establishment expenditure even negative. Overall factors show that all the e-channels have increased their contribution in productivity by increasing the business and decreasing establishment expenditure in almost all bank groups except one or two. Among all the bank groups, only G-II proves strong effect of all echannels on its productivity, G-III also depicts the similar picture except one or two echannels. Among all the bank groups only G-IV shows decreased effect of all e-channels on productivity. It is important to note that G-II is poor at some level that is why it has increased its establishment expenditure due to more use of e-banking that needs to be improved. From this table, it is evidence that e-channels are contributing positively to enhance the overall productivity of the banking industry which shows excellent management of transformation through IT. 3.6.4 Productivity at Different Levels of E-Channels Impact Table 3.48 is an evidence for the extent of effect of the e-channels on productivity factors. G-I has strong effect of all e-channels on branch and employees business while in case of establishment expenditure, all e-channels have strong effect in pre-ebanking period but becomes poor in the second period having below 50 pc impact, and it is an excellent sign because of negative impact. In case of G-II also, business per employee and branch have strong effect during both study periods while in case of per employee establishment expenditure, maximum e-channels have below 50 pc impact during pre-ebanking period but in the post-ebanking period and four e-channels have more than 50 pc effect. Similar is the picture in case of establishment expenditure per branch where the effect is above average in both study periods. G-III proves that maximum e-channels except one have poor impact on its productivity during both the study periods. In case of G-IV, all e-channels have strong effect on productivity in pre-ebanking period while in the post-ebanking period echannels turns to be poor in effecting productivity factors except business per branch that has strong effect of three e-channels even others are also affecting above average level. In case of industry, majority e-channels have strong effect on business per employee and per branch in

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both study period but it is poor in case of establishment expenditure which proves the excellent contribution of e-channels in productivity of Indian banking industry. Table 3.48
E-Channels and Productivity at Different Levels Extent of G-I G-II Impact Pre* Post** Pre* Post** Pre* Business per Employee 0 25 4 25 50 1 50 75 2 75 100 6 6 4 6 Establishment Expenditure per Employee 0 25 4 1 25 50 2 4 5 50 75 2 75 100 6 1 4 Business per Branch 0 25 5 25 50 50 75 1 75 100 6 6 5 6 Establishment Expenditure per Branch 0 25 5 5 25 50 1 1 50 75 1 4 3 75 100 5 1 3 Note: * Pre-ebanking Period, ** Post-ebanking Period G-III Post** 2 2 1 5 3 1 1 4 1 5 3 1 1 5 1 1 3 4 1 1 5 1 5 1 5 6 5 4 1 2 4 Pre* G-IV Post** 1 4 1 5 1 5 6 Pre* Industry Post**

Overall, business per employee of partially IT-oriented banks has strong impact, establishment expenditure per employee and per branch is better of G-IV having poor impact even negative. It is concluded from the table that banking industry is at benefit if use more IT, tables are the clear evidence of the matter. More but appropriate usage of IT turns the business in excellence.

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3.7 Conclusion Overall, post-ebanking period is steadier which shows outstanding improvement in employee and branch productivity with extreme effect on foreign banks, which is obsessed by technological enhancement and proficient management of innovations. Though, postebanking period substantiates enrichment of productivity of all banks but partially IT-oriented banks are at bigger diversity which is mainly because of over employment and wider branch network and poor IT infrastructure. IT with other facets is a decisive artifact of transformation, where ebanks productivity is a little evidence. IT index shows upward trend as industry records 3.88 pc growth where foreign banks show larger IT index (57.43 pc) followed by new private sector banks which is a major support for their excellent productivity. Though, post-ebanking period witnesses growth in IT index but still Indian banks have not adopted IT in totality as it is just 50 pc. Among all e-channels, mobile banking has strong effect on productivity followed by internet banking where productivity of public sector and foreign banks affect at the most by internet banking, of old private sector banks by mobile banking, of new private sector banks by ATMs and of industry by tele banking. Almost all e-channels have superior contribution in productivity of all bank groups except old private sector banks show increased establishment expenditure whereas public sector banks and overall industry gain the most fruitful results. A positive correlation of IT with productivity anticipates future scope for further technological developments. On the whole, it is concluded that post-ebanking period has excellently improved the productivity through the increasing use of IT, more particularly mobile-banking along with internet-banking. IT usage has proved increase in business and decrease in establishment expenditure which further contributes to make the productivity positive. Old private sector banks are at the loss in some cases because its poor and improper management of IT leads increase in establishment expenditure which needs to be improved to catch the benefits.

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