Contextually, it may be mentioned that banks in most developed countries and several emerging economies have NIM (as a percentage to total assets) of around 2 per cent. This provides some indication that competition in banking still has some way to go in India. Productivity Studies on productivity in Indian banking have only begun to emanate of late.
A recent study found that total factor productivity growth has improved marginally in the post deregulation period, but there was little evidence of narrowing of productivity differentials across ownership categories following deregulation (Kumbhakar and Sarkar, 2003). Among various productivity indicators, labour productivity indicators like business per employee and profit per employee are most commonly used.