PERFORMANCE REVIEW OF REGIONAL RURAL BANKS IN INDIA USING RATIO ANALYSIS

Banking industry has been amongst the few to maintain resilience despite bankruptcy of banking and financial institutions, despite the debt crisis in major economies of the world. The tempo of development for the Indian banking industry has been remarkable over the past decade before liberalization era; the picture of Indian banking was completely different. The study was mainly conducted in order to see the impact of banking sector reforms on the performance of Regional Rural Banks with respect to productivity and efficiency of the banks can be evaluated with various ratios; non-interest margin to total assets, operating cost to total assets and non-interest income to total income returns on assets, net profit and operating profit. The major implications of the study were that the performance of these banks worsened in the initial years of reforms, however, the performance improved thereafter gradually after 1996-97. In the nut shell, the ratio analysis demonstrates that the banking sector reforms have provided the platform to the Regional Rural Banks to attain the targets of rural development and financial inclusion. The success of a bank depends upon the management of these ratios so that they have to be kept within the tolerance level