Measuring the Efficiency of the Iranian Banking System Using DEA Approach

The aim of this paper is to measure the technical, allocative and economic efficiency of the Iranian banking system using Data Envelopment Analysis (DEA) approach. In this survey, the performance of ten Iranian banks are studied during the period 1997-1999. From the view point of technical, allocative and economic efficiencies, three banks, Melli, Keshavarzi and Industry and Mine are efficient. From the view point of technical efficiency, Export Development bank is efficient. The average of technical, allocative and economic efficiency during the period of study is 84.2%, 86.4% and 74.3%, respectively. The overall results indicate that the technical, allocative and economic efficiency of specialized banks are higher than that of the commercial banks.