The effect of information technology in the Indian banking sector is analysed using the stochastic frontier production model to estimate technical efficiency during 2002–18. The evidence suggests that the adoption of IT has a positive and significant impact on the performance of banks. On average, nationalised and new private sector banks are more efficient than foreign ones, while old private sector banks have fallen back in efficiency. While a higher number of bank employees adversely impacts efficiency, greater capital positively impacts banking performance. It is also found that IT-led performance is a promising strategy for a multiplier effect on banking performance.
