A Modified EATWIOS Framework for Efficiency Assessment: A Case Study on the Banking Sector

Vinay Kumar Shaw; Sanjib Biswas; Banhi Guha

doi:10.31181/msa31202644

Authors

Vinay Kumar Shaw T H K Jain College, 6 Ram Gopal Ghosh Road, Cossipore, Kolkata, West Bengal 700002, India Author https://orcid.org/0000-0002-1382-3730
Sanjib Biswas Amity Business School, Amity University, Kolkata, AA II, Newtown, West Bengal 700135, India Author https://orcid.org/0000-0002-9243-2403
Banhi Guha Xavier Business School, Action Area I, IIIB, Newtown, Kolkata, West Bengal 700160, India Author https://orcid.org/0000-0001-8231-5329

DOI:

https://doi.org/10.31181/msa31202644

Keywords:

Non-performing assets, Peer benchmarking, Slack-efficiency, EATWIOS, MPSI, Banks, WACC, MCDM

Abstract

Efficiency assessment of banks is a complex decision that depends on various factors. This paper proposes the creation of a framework for efficiency assessment for firms by considering capital structure, asset quality, and financing costs. This present paper proposes a comprehensive framework for efficiency assessment by modifying the EATWIOS method. This present paper incorporates slack efficiency, peer evaluation, and reference-based normalization into the conventional EATWIOS method. This paper proposes the use of the MPSI (modified preference selection index) method for determining the weights of the criteria. This paper proposes conducting a multi-period assessment from FY 2020–21 to FY 2024–25 for 12 public sector banks and 14 private sector banks. The results show significant variations in efficiency among banks. The proposed framework has shown improved discriminative ability and ranking efficacy for various settings of the model. The robustness is verified using sensitivity analysis, rank correlation assessment, and variation analysis. The results will be helpful for bank managers in developing policies for maintaining financial stability and risk management to improve efficiency.

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