Mobile Banking Growth and Operating Efficiency in Indian Commercial Banks: Evidence from Ten Public and Private Sector Banks, FY2017-18 to FY2024-25 (International Journal of Creative and Open Research in Engineering and Management)

Summary

• Average monthly mobile banking transactions of the ten studied banks grew from 106 million in FY2017-18 to 10,985 million in FY2024-25.p.1
• Annual transaction volume expanded from 35.5 billion in FY2021-22 to 131.8 billion in FY2024-25, representing a CAGR of 54.9%.p.2
• Year-on-year transaction volume growth decelerated over time, falling from 80.9% in FY2021-22 to 41.6% in FY2024-25.p.2
• Public-sector banks accounted for 68% of the total FY2024-25 transaction volume across the ten banks.p.2
• Public-sector banks reported a mean cost-to-income ratio of 49.4% compared to 45.9% for private-sector banks in FY2024-25.p.3

Key insights

1. Mobile banking usage intensity showed a positive but statistically insignificant association with cost-to-income ratios (Spearman ρ = 0.35, p = 0.33).p.1
2. Cost-to-income ratios did not differ significantly between public-sector and private-sector banks in FY2024-25 (49.4% versus 45.9%, p = 0.44).p.1
3. Bank-level mobile banking volume growth between FY2021-22 and FY2024-25 ranged from a CAGR of 24.6% for Axis Bank to 69.9% for Kotak Mahindra Bank.p.2
4. ICICI Bank recorded the lowest cost-to-income ratio among all ten banks in FY2024-25 at 38.6%.p.3
5. IndusInd Bank registered the highest cost-to-income ratio among the sample banks in FY2024-25 at 60.2%.p.3
6. Monthly usage intensity across all ten banks averaged 205 transactions per active customer in FY2024-25, ranging from 29.5 at SBI to 534.2 at Punjab National Bank.p.3
7. Net NPA ratio was the strongest correlate of bank cost-to-income ratio among control variables tested, showing a correlation of r = 0.59.p.4