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The IUP Journal of Bank Management
Comparative Performance Analysis
of Nationalized Banks:
A CAMEL Model Analysis
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The banking system plays a pivotal role in the economy. Sound financial health of a bank is important for depositors, shareholders, employees and whole economy as well. This paper attempts to evaluate the performance of nationalized banks by using CAMEL parameters during the period 2006-07 to 2015-16. These parameters are capital adequacy, asset quality, management capacity, earnings ability, and liquidity of the financial institutions. Supervisory authorities assign each bank a score on a scale, and a rating of one is considered the best and a rating of five is considered the worst for each factor. The findings of the study reveal that Andhra Bank is ranked first, followed by Indian Bank, Corporation Bank, Syndicate Bank and IDBI.

 
 
 

A sound financial system is indispensable for the growth of a healthy and vibrant economy. A sound banking industry comprises a paramount component of the financial services sector. The banking system plays a pivotal role in the economy as it intermediates between the surplus fund generation areas to areas of productive asset creation, thus playing a vital role in building major economies. Banking in India has been through a long journey. The Indian banking sector has been working in a more open and globalized environment. The liberalization process of Indian economy has made the entry of new private sector banks possible and allowed the foreign sector banks to increase their branches in the banking sector. The public sector banks had dominated the banking sector. With the increased competition and emphasis on profitability, the public sector banks have to face the competition with social welfare objectives. Performance of the banking sector is an effective measure and indicator to check the performance of any economy. The banking sector provides diversified services other than accepting deposits and lending loans like debit cards/credit cards, insurance, safety lockers, ATM, online fund transfer, etc. The present study examines the performance of 21 banks for the period 2006-16 using CAMEL model.

 
 
 
Bank Management Journal, Capital adequacy, Asset quality, Management Capacity, Earnings ability, Liquidity of the financial institutions.