ALLANA MANAGEMENT JOURNAL OF RESEARCH, PUNE - Volume 1, Issue 1, January 2011 - June, 2011

Pages: 72-80
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VALUE CREATION IN INDIAN BANKING INDUSTRY : AN ANALYSIS

Author: DR. R. SATISH, ASST. PROFESSOR, M. DANIEL RAJKUMAR

Category: Human Resource Management

Abstract:

Shareholders' value creation and maximization has become the hallmark of corporate parlance. For a
number of years there has been a growing awareness of the importance of shareholder value for financial
strategy and management. At the same time there has been growing concern that the traditional
accounting measures of performance have serious inherent limitations that may lead to poor financial decision
making. In the academic world, a number of studies have been carried out on this burning topic abroad but has not
received much attention from Indian context in Banking Sector.The concepts of Economic Value Added (EVA) and
Market Value Added (MVA), which are currently regarded as the important indicators of shareholder value and
financial performance, are examined, along with some research evidence supporting them (and other evidence
opposing them). Various aspects of EVA are discussed, including different ways of calculating them, and their link
to other financial concepts such as employee productivity. This study helps us whether there is a prime facie
case for the adaptability of EVA as one of the performance measurement tool in Indian Banking Sector.It is hoped
that the results and perspectives gained from this study will be helpful to bank managers who aim to optimize their
approach to shareholder value management.

Keywords: Economic Value Added, Market Value Added, Employee Productivity.