Development of an Integrated TOPSIS-Quality Function Deployment Model for Sustainability Assessment of Indian Banks

Development of an Integrated TOPSIS-Quality Function Deployment Model for Sustainability Assessment of Indian Banks

Rishi Dwivedi (Xavier Institute of Social Service, India), Bhaskar Bhowani (Xavier Institute of Social Service, India) and P. Kritee Rao (Xavier Institute of Social Service, India)
DOI: 10.4018/978-1-5225-8579-4.ch013
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The contribution of banks to sustainable advancement is supreme, considering the vital part they play in funding the economic actions of the human race. But, in the fast-changing banking ecosystem, quantifying the level of sustainability attained by financial institutions is a challenging task due to the need of considering a wide range of economic, environmental, and social dimensions concurrently. In this chapter, a novel method based on the technique for order preference by similarity to ideal solution (TOPSIS) and quality function deployment (QFD) is proposed for the first time to evaluate the sustainable efficiency of banking operations. The QFD technique is employed here to provide due importance to the customers' needs with respect to banks' sustainability, and subsequently calculate the priority weights of the considered criteria of sustainability principles. Then, TOPSIS is employed to rank alternatives based on the extent to which they conform to sustainability principles.
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Literature Review

Banking industry have gradually transformed into an extremely service oriented sector and thereby attracted various researchers and academicians to contribute towards its performance evaluation through various techniques. Therefore, first half of this review of past research work focuses on evaluation of various methods that have been applied to analyze various aspects of banking. Furthermore, diverse MCDM techniques employed for performance evaluation of varied dimensions of different industries are also examined in second part of literature review.

Key Terms in this Chapter

Tier 1 Capital: It measures the financial strength or capital adequacy of a bank.

Utility Function of Banks: It comprises of actions, such as undertaking foreign exchange transactions, providing safe custody of valuables, issuing letter of credit to promote the foreign trade, etc.

Portfolio: It is a group of financial assets which are being held by the investors and are managed by financial professionals or fund managers.

Agency Function of Bank: It includes various activities, like collection of checks, accepting bills, remittance facilities, collecting payments, etc.

Banking Ombudsman: It is a quasi-judicial authority which is being formed with intent to resolve the grievances of the customers of a bank.

Balance Sheet: It is a financial statement showing the finance of a company on a particular date.

Credit to Deposit Ratio: It is the ratio of assets and liabilities of the banks.

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