Evaluation of Commercial Banks’ Interest Rate Policy Efficiency Based on the DEA–SFA Approach

This article investigates methodological approaches to assessing the efficiency of commercial banks’ interest rate policy. The main objective of the study is to determine the efficiency of lending and interest income generation through the use of mobilized resources and the management of related costs in commercial banks. The study uses panel data covering 11 commercial banks in Uzbekistan for the period 2015–2024. A multifactor frontier approach was employed to assess the efficiency of interest rate policy, with the volume of deposits, interest expenses, and operating expenses selected as inputs, while the loan portfolio and interest income were selected as outputs. First, the relative efficiency of commercial banks was assessed using the Data Envelopment Analysis (DEA) model. In addition, the Stochastic Frontier Analysis (SFA) model was employed to distinguish random statistical error from the inefficiency component. Based on the complementary characteristics of the DEA and SFA approaches, the study substantiates the possibility of conducting a comprehensive assessment of the efficiency of banks’ interest rate policy. The findings indicate that the efficiency of commercial banks’ interest rate policy depends not only on the level of lending and deposit interest rates, but also on the effective utilization of mobilized resources, management of interest and operating expenses, and the ability to generate loan portfolios and interest income. The proposed approach provides a methodological basis for assessing and improving interest rate policy in commercial banks based on efficiency criteria.