Milind Sathye

Efficiency of banks in a developing economy: The case of India

Abstract The objective of this paper is to measure the productive efficiency of banks in a developing country, that is, India. The measurement of efficiency is done using data envelopment analysis. Two models have been constructed to show how efficiency scores vary with change in inputs and outputs. The efficiency scores, for three groups of banks, that is, publicly owned, privately owned and foreign owned, are measured. The study shows that the mean efficiency score of Indian banks compares well with the world mean efficiency score and the efficiency of private sector commercial banks as a group is, paradoxically lower than that of public sector banks and foreign banks in India. The study recommends that the existing policy of reducing non-performing assets and rationalization of staff and branches may be continued to obtain efficiency gains and make the Indian banks internationally competitive which is a declared objective of the Government of India.

Measuring productivity changes in Australian banking: an application of Malmquist indices

Gives an overview of the Australian banking industry, reviews relevant research and analyses productivity changes 1995‐1999 in a panel of 17 banks to assess the effects of deregulation and the reforms introduced by the Wallis report (1997). Explains the methodology (Malmquist indices calculated by data envelopment analysis) and presents the results, which show a decline of 3.1 per cent in technical efficiency over the period and of 3.5 per cent in the total factor productivity index, although there was an annual productivity growth rate of 1.3 per cent. Discusses the underlying reasons for this, compares productivity changes in individual banks and finds that size makes no difference. Considers the implications for policy makers, describes the industry as having a “limit of deregulation” syndrome and believes that further productivity gains depend on advances in technology.

Estimating the cost of compliance of AMLCTF for financial institutions in Australia

Purpose – The purpose of this paper is to find out the likely compliance cost of anti‐money laundering and counter terrorism financing (AMLCTF) for financial institutions in Australia to help understand the regulatory burden of the legislation.Design/methodology/approach – The paper adopts a case study approach. Using the method of analogy, the cost of compliance is estimated.Findings – It is found that the legislation brings substantial financial regulatory burden on the financial institutions in Australia. It is also found that the compliance cost is quite substantial and stands at about A

Adopting a risk‐based approach to AMLCTF compliance: the Australian case

1.02 billion for the banking industry as a whole at 2007 prices. The per capita burden has been estimated at A

Developing financial intelligence: an assessment of the FIUs in Australia and India

50 approximately. The authors estimate compares well with other publicly available estimates.Research limitations/implications – Limitations of case study research method apply. Through this case study, prior work on regulatory cost burden on organisations is confirmed – in the context of financial instituti...

Turnaround of the Indian Railways: a public ownership saga

Purpose – The purpose of this paper is to develop a possible method of money laundering and terrorism financing (MLTF) risk assessment in non‐bank entities that are the subject matter of anti‐money laundering and counter terrorism financing (AMLCTF) Tranche II in Australia.Design/methodology/approach – The objectives are achieved by proposing a scorecard of risk assessment under its various dimensions drawing from the literature on credit‐scoring models. The method of analogy has been used and appropriate changes made to the elements of typical credit‐scoring model to arrive at a risk assessment model under AMLCTF II. The theory in which the paper is grounded is theories of money laundering regulation. Theory suggests an inverse relationship between money laundering regulation and the amount of money laundering. The more effective the regulatory mechanism the more costly it is for money launderers to launder funds and the lesser the amount of money laundering.Findings – It was found that the AMLCTF Tranch...

Sustainability and outreach in microfinance institutions in India: an ethical analysis

Purpose – The purpose of this paper is to present a comparative position of the extent of commonality or diversity in the rationale, objectives, processes used and outcomes achieved by financial intelligence agencies in India and Australia. An effective financial‐intelligence unit (FIU) can make a significant contribution to combating serious financial crimes nationally and internationally.Design/methodology/approach – The agencies in these two countries are compared using the framework for assessment of financial regulatory agencies – suitably modified to capture the specialist role of such agencies. Information available at the web site of the two agencies has been used.Findings – The study shows several commonalities and differences in the financial intelligence agencies in the two countries and points to operational and policy changes required in making the units more effective.Originality/value – It is hoped that the study would encourage similar studies in respect of other FIUs and help in contribut...

Factors influencing the intention to use of mobile value‐added services by women‐owned microenterprises in Fiji

The reported turnaround of the Indian Railways (IR) has attracted wide notice. This article locates the enterprise within the broader Indian public sector and explores the factors that led to the turnaround from a low performing organisation to a high performing one. The case study method is used, with the developing theory of enterprise turnaround underpinning the case study. The theory suggests that turnaround successes need to be understood in terms not only of managerial actions, but also of favourable environmental conditions. This study reveals that both managerial leadership and good luck contributed to the turnaround success of the IR. There was no element of privatisation (apart from some limited outsourcing) within this turnaround. All happened within the context of full public (governmental) ownership. An underlying suggestion is that more such studies could help authorities assess and improve public enterprise performance.

The impact of foreign ownership and off-shore investing on technical efficiency: evidence from Chinese managed funds industry

Abstract We use an ethical analysis framework to explain the tensions that microfinance institutions (MFIs) face in following ethical practices when faced with the competing objectives of financial sustainability and social outreach. The extant view is that these institutions have to resort to unethical practices such as usury interest rates and forced loan collections to survive. After a case study of five MFIs, we find that this is not the case, and competing objectives can very well be achieved following ethical practices. This article is set against the background of suicides by microfinance borrowers in India.

Malaysian DNFBPs’ Perceptions on Awareness, Perceived Impact and Views on the AML/CFT Requirements☆

We investigate the factors influencing the intention to use mobile value‐added services in the Pacific island of Fiji. Technology adoption literature suggests that perceived usefulness and perceived ease of use influence intention to adopt new technology. However, behavioral research suggests that intention to adopt is influenced by social norms. We investigate the impact of these 3 constructs on behavioral intention to use mobile value‐added services in Fiji—a country that has some unique characteristics such as the culture of “sharing” and “reciprocity.” We surveyed 74 women microentrepreneurs and found that the predominant driver of intention to adopt technology in collectivist societies such as Fiji is social influence. It was found that social influence also impacts perceived usefulness and perceived ease of use and through these the intention to adopt. Accordingly, in societies such as Fiji, policy makers and industry need to engage social organizations/networks for advancement of technology adoption.