Fuzzy Multi Criterion Decision Making Method to Analyze Performance of Banking Sector

Abstract

Performance evaluation of any financial institution is extremely important to look after the health and prospect of the institution. In many research of performance evaluation analysis of banks, several ratio parameters are used mostly in statistical analysis. Designing effective and comprehensive model for evaluation process of financial matters in banking sector is complex due to multiple criteria and parameters, mostly uncertain in nature. This paper presents a comprehensive process considering several financial criteria of several alternatives on the basis of several expert’s (decision maker’s) opinion and subjective judgment. Intensity of importance is represented in fuzzy scale. We used fuzzy AHP-preference programming (FPP) to obtain priority weights associated with each criteria and compromise ranking method (VIKOR) considering Market Capital, Net Sales, Net Profit, Total Assets, and Other Income in ranking alternatives. A case study involving ten active Indian Public Sector Unit (PSU) banking industries is undertaken to illustrative the feasibility of the suggested approach. A sensitivity analysis is also carried out for checking the method reliability.