Intellectual Capital Efficiency and Performance of Banks in India

Abstract

The aim of this paper is to examine the impact of intellectual capital efficiency on the performance of commercial banks in India for two
time periods, viz. 2018-19 and 2020-21 representing the pre and post-merger periods. The IC efficiency (ICE) of the banks is measured
using the standard Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE). The performance is measured in terms of
Return on Assets (ROA), Return on Equity (ROE), Net Interest Margin (NIM), and Return on Investments (ROI). The results show that
sub-components of IC have impacted the performance of banks variedly, but not consistently. The ICE of private sector banks has
increased over the period of study. The impact of merger on the ICE performance of the individual public sector banks has been mixed,
though on the average, there is no immediate statistically significant impact of the mergers on the ICE performance of all the public sector
banks in India.
Key words: Intellectual Capital Performance, Human Capital, Banking, Productivity, Profitability, Mergers