An Analysis of Financial Performance of Select Nationalised Banks through CAMEL Model

Banking sector is one of the fastest growing sectors in India. Today‘s banking sector becoming more complex. Evaluating Indian banking sector is not an easy task. There are so many factors, which need to be taken care while differentiating good banks from bad ones. Performance evaluation of the banking sector is an effective measure and indicator to check the soundness of economic activities of an economy. The present study attempts to evaluate the financial performance and soundness of selected nineteen nationalized banks in India using CAMEL model during the study period 2014-2018. CAMEL model measures the financial performance of banks from each of its parameter. These parameters are Capital adequacy, Asset Quality, Management efficiency, Earnings and Liquidity used to reflect the financial performance, financial condition, operating soundness and regulatory compliance of the banking institution. Twenty financial ratios related to each parameter are used to analyses the financial performance of selected banks. The study reveals that in overall performance rating Indian Bank secured the first rank having the excellent performance followed by Andhra Bank and Bank of Baroda. In bottom United Bank of India was on the last position followed by, Indian Overseas Bank, Dena Bank, UCO Bank and Central Bank of India during the study period.