Performance Evaluation of Selected Private Sector Banks Through Camel Model in India

Abstract

The research findings on the application of the CAMEL rating technique to the performance analysis of a banking system are summarized in this report. It aimed to assess the operational performance of the banking system by evaluating its capital adequacy, asset quality, management effectiveness, earnings, and liquidity, intending to establish a ranking based on the analysis.The study examined a sample of the top five banks in India, and the banks financial reports and performance indicators were used to determine the CAMEL rating. According to the study, the CAMEL rating was useful in identifying the banks advantages and disadvantages as well as offering a thorough analysis of their overall performance. The document examines the
consequences for the banking sector and provides an in-depth analysis of the discovered results. Strong capital adequacy, asset quality, and effective management are critical for preserving a sound and stable banking system, according to the study. Enhancing earnings and liquidity management is one of the areas for improvement identified by the study. Overall, by highlighting the CAMEL rating technique efficacy and offering insights into bank performance, this study advances the field of banking performance analysis. Policymakers and bank managers can enhance the stability and performance of the banking system by implementing the recommendations provided by the study.