In recent years, Indian banks witnessed a huge increase in gross non-performing assets and loan write-offs. In this paper, impact of these two undesirable outputs has been examined on the profit efficiency of the banks using Nerlovian approach, which perhaps is a novel attempt in Indian context. It is found that inclusion of these two undesirable outputs has a significant impact on the profit efficiency of the Indian banks vis-à-vis their non-inclusion, and it is more evident from sharp decline in the profit efficiency of these banks. Also, it is observed that the allocative inefficiency of the banks was the main cause for their profit inefficiency. Further, loan write-offs should not be merely viewed as cleaning of the balance sheet of the banks as it has a noticeable impact on their profit efficiency.

中文翻译：

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不良资产和贷款冲销对印度银行利润效率的影响

近年来，印度银行目睹了不良资产总额和贷款冲销的大幅增长。在本文中，已经使用Nerlovian方法研究了这两个不良输出对银行利润效率的影响，这在印度背景下可能是一种新颖的尝试。发现将这两个不良输出包括在内对印度银行的利润效率产生了显着影响（相对于不包括在内），这从这些银行的利润效率急剧下降中可以明显看出。此外，可以观察到，银行的配置效率低下是其利润效率低下的主要原因。此外，贷款冲销不应仅仅视为对银行资产负债表的清洗，因为它对银行的利润效率有显着影响。