Financial Performance Analysis of selected Public and Private sector banks in India using CAMELS Model

- Parth Khandelwal, Student, Faculty of Management, GLS University, Ahmedabad

- Isha Dave, Assistant Professor, Faculty of Management, GLS University, Ahmedabad

Abstract:

The banking sector is considered to be the backbone of any financial system and economy. Banks play a vital role in economic development of any country and thus it is important to measure the performance of banking sector. The present study attempts to analyse and compare the financial performance of selected Public and Private Sector banks in India. The selection of the banks is based on the NIFTY PSU Bank Index and NIFTY Private Bank Index as on 31 st March, 2020. For the study, sample of 10 banks are selected which includes Top 5 Public sector and Top 5 Private sector banks from both the Indexes. The Sampling method used is non-probability convenience sampling. The present study has been done by using CAMELS model. CAMEL model is a supervisory rating system and has been considered as one of the widely used tools for evaluating Capital Adequacy, Asset Quality, Management Efficiency, Earnings Quality, Liquidity and Sensitivity of banks. The study concluded that IndusInd bank is ranked first followed by HDFC Bank and Bank of Baroda. The study analysed that Private sector banks are more productive and efficient as compared to Public sector banks. The study has been providing useful information to stake holders like Creditors, Investors, Depositors, Employees, Researchers etc. to know about banks’ liquidity and its financial position, make better investment decisions and for future research study.

Keywords:

Financial Performance, Public Sector Bank, Private Sector Bank, CAMLES Model

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