International Journal of Commerce & Business Management

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Analyzing the Financial Soundness of Public Sector Banks in India Using CAMEL Model


Affiliations
1 College of Agribusiness Management, GBPUAT, Pantnagar, Udham Singh Nagar (Uttarakhand), India
2 College of Agribusiness Management, GBPUAT, Udham Singh Nagar (Uttarakhand), India
     

   Subscribe/Renew Journal


The Indian banking system has undergone tremendous changes in the last decade, its financial soundness and performance being paramount in the achievement of a stable and sustainable economic growth. Thus, the aim of this research was to analyze the financial soundness of the public sector banks that operate in India. In order to achieve this, one of the most popular methods for the analysis of the financial soundness of banks namely CAMEL model was used. The obtained results highlight the strength and vulnerabilities of the analyzed banks underlying the need to strengthen the concerns of the decision makers from banks to improve and increase their soundness. The study concluded that the Punjab National Bank’s overall performance was very good followed by State Bank of India and the financial performance was very poor in case of IDBI.

Keywords

CAMEL Model, Financial Soundness, Performance, Public Sector Banks.
Subscription Login to verify subscription
User
Notifications
Font Size


  • Annual Reports of Public Sector Banks, 2013-17.

  • Evan, O., Leone, A.M., Gill, M. and Hilbers, P. (2000). Macro prudential indicators of financial system soundness, IMF Occasional paper, no.192.

  • Hays, F., De Lurgio, S. and Gilbert, A. J. (2009). Efficiency ratios and community bank performance, J. Finance & Account., 1: 1.

  • IMF and World Bank (2005). Financial sector assessment: A Handbook.

  • Ishaq, A.B., Karim, A., Ahmed, S. and Zaheer, A. (2016). Evaluating performance of commercial banks in Pakistan: An Application of CAMEL model. J. Business & Financial Affairs, 5(1):1-30.

  • Kumar, M. A., Harsha, G. S., Anand, S. and Dhruva, N. R. (2012). Analyzing soundness in Indian banking: A CAMEL approach. Res. J. Mgmt. Sci., 1(3) : 9-14.

  • Master Circulars (2017). Prudential norms on capital adequacy, Reserve Bank of India.

  • Roman, A. and Sargu, A.C. (2013). Analysing the financial soundness of the commercial banks in Romania: an approach based on the camels framework. Procedia Econ. & Finance 6 : 703-712.

  • Shukla, Sneha S. (2015). Analyzing financial strength of Public and Private Sector Banks: A CAMEL approach. Pacific Business Rev. Internat., 7 (8) : 44-50.

  • Trivedi, Apoorva, Rehman, Anisur and Elahi, Yasir Arafat (2015). A comparative analysis of performance of public and private sector banks in India through CAMEL rating system. Internat. J. Appl. Financial Mgmt. Perspectives, 4 (2) :1724-1736.


Abstract Views: 303

PDF Views: 1




  • Analyzing the Financial Soundness of Public Sector Banks in India Using CAMEL Model

Abstract Views: 303  |  PDF Views: 1

Authors

B. Krishnakumare
College of Agribusiness Management, GBPUAT, Pantnagar, Udham Singh Nagar (Uttarakhand), India
Saurabh Singh
College of Agribusiness Management, GBPUAT, Udham Singh Nagar (Uttarakhand), India
J. P. Pandey
College of Agribusiness Management, GBPUAT, Udham Singh Nagar (Uttarakhand), India

Abstract


The Indian banking system has undergone tremendous changes in the last decade, its financial soundness and performance being paramount in the achievement of a stable and sustainable economic growth. Thus, the aim of this research was to analyze the financial soundness of the public sector banks that operate in India. In order to achieve this, one of the most popular methods for the analysis of the financial soundness of banks namely CAMEL model was used. The obtained results highlight the strength and vulnerabilities of the analyzed banks underlying the need to strengthen the concerns of the decision makers from banks to improve and increase their soundness. The study concluded that the Punjab National Bank’s overall performance was very good followed by State Bank of India and the financial performance was very poor in case of IDBI.

Keywords


CAMEL Model, Financial Soundness, Performance, Public Sector Banks.

References