Bangladesh Bank Training Academy Journal

Abstract

The present paper is an attempt to measure the technical, allocative, and cost efficiency of Islamic banks operating in Bangladesh. The research is conducted by using of nonparametric technique DEA (Data Envelopment Analysis) as a mostly used tool for analysis of efficiency in banking. Two outputs and three inputs have been used for the purpose of the analysis according to the input-oriented approach. The authors have selected seven Islamic Banks listed in the Dhaka Stock Exchange for conducting the study and the secondary data for the same was related to the year 2006 to 2011. Through the study, EXIM Bank Limited was found to be most efficient Islamic bank with an average efficiency score of 0.9992 on the basis of the efficiencies to which they were put to test. ICB Islamic bank Limited was found to have the highest lack of efficiency among all the Islamic banks in Bangladesh.