Analytical Study of Financial Wellbeing of Selected Public and Private Sector Banks: A CAMEL Approach

Attesting to the enhancement of the overall health of commercial banks, accounting-based indicators show wholesome financial performance. The study attempts to appraise the financial performance of selected private and public commercial banks of India for the period from 2015-19. The attempt comprises 10 commercial banks of India, the top 5 scheduled commercial banks of public and private segments each, based on their market capitalization and total asset value. In the present chaotic scenario, it is pertinent to examine the prominent indicators of the selected banks with help of the CAMEL model that encompasses capital-adequacy, asset-quality, management-efficiency, earning-performance, and liquidity-position by employing the panel data estimations. The outcome of t-test signifies that the general financial performance i.e., management of NPA, profit per employee, net profit to the total fund of private sector banks seems comparatively healthier than the public banks during the study time. Since the momentum of mergers and acquisitions has begun in Indian banking sector so, the study can clarify the mechanism of prominent indicators based on the CAMEL approach which in turn, might help the regulators to adjust and calibrate the design of future policy requirements.