Based on a survey, we found that the difference in performance between traditional and modern banks set up in the liberalised regime after 1993 cannot be explained by the use of technology alone, as is widely assumed. Nor can it be accounted for fully by the changes in staffing or capital patterns. The critical difference is not in technology adoption, but in the so-called soft management issues.
Facing tremendous competition from foreign banks and private banks, the very survival of some of the traditional banks is at stake. Their poor financial performance raises doubts about their capabilities, commitment and intentions to perform their functions efficiently and professionally.
This also raises the question as to whether the causes for such differential performance may be the management practices and other organisational factors. Or could differences in performance be due to external factors such as government policies, controls, the legislative framework and so on? Or, perhaps, the extensive use of technology
