Since the inception of the financial deregulation programme in the early 1990s, the Indian banking industry has undergone gradual but notable reforms. The important policy changes include among others, the reduction of statutory pre-emptions in the form of cash reserve ratio (CRR) and statutory liquidity ratio (SLR), deregulation of the administered interest rates, allowance of liberal entry of de nova banks. A key objective of these reforms was to create more diversified, profitable and productive banking system by limiting state interventions and fostering competition among banks. Our focus is twofold here: First, to analyse the cost efficiency of the Indian banking sector and to find whether there exists any convergence in cost efficiency among banks. Second, to estimate the total factor productivity (TFP) growth experience of the Indian banking and decompose it into its economically meaningful components, viz., technical efficiency change, technological change and scale change components. Our results indicate large differences in mean cost efficiency among banks across various ownership categories. Also, we observe strong evidence favouring convergence in cost efficiency, driven by the both catching-up and lagging-behind phenomena. As for the results of TFP change are concerned, we found a marginal improvement in productivity growth among Indian banks during the post deregulation period. The TFP growth was found to be mainly driven by technological progress rather than efficiency improvement. Again, the magnitude of productivity growth have differed across different ownership categories. The productivity growth is observed to be the highest among foreign banks, followed by the domestic private banks; whereas there has been almost no change in the productivity among the state owned banks.