Friday, 08 Dec, 2023




Innovations-Led Paradigm Shift in the Indian Banking Sector

International Journal of Financial Management

Volume 9 Issue 2

Published: 2019
Author(s) Name: Bhavna Chhabra | Author(s) Affiliation: Professor, IBS, Gurgaon, Haryana, India.
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Modern economists emphasize the importance of innovations and technological changes in the growth of an economy. The innovations and technological changes bring about transitional change in the growth of an economy. In case of India, the growth of tertiary sector in the gross domestic product has already achieved the 50% mark. Services sector, in general, and banking, in particular, plays a significant role in the growth of any economy. Banking sector is the most crucial pillar which supports the entire financial system. In the current phase of severe competition, performance is a buzzword and in addition to other factors, performance is a function of innovations. Therefore, an analysis of service sector innovation and performance in tertiary sector, in general, and of banking sector, in particular, is the need of time. In this context, this study is an attempt to relate the service sector innovation and performance in the Indian banking sector. Innovation inputs are information and communication technology, R&D and human capital, throughputs are organizational change and outputs are productivity, profitability, efficiency and growth. Some of the innovations in banking sector are: introduction of ATMs, credit card, and debit card, smart card, increased categories of loans, Demat account, young stars account, senior citizens account, money transfers, core banking, various kinds of insurance, mobile banking, internet banking, mutual funds, filing IT returns and online taxation, updating current market trends, investing in diversified portfolio, employees retaining schemes, and so on. In this setting of argument, the work is an attempt to analyze the innovation and performance in the Indian banking sector.

Keywords: Innovation, Indian Banking Sector, Performance Parameter, Process Innovation, Product Innovation, Input Output

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