Comparative Analysis of Top Private Sector Banks in India based on CAMEL Parameters

Mr. Rajveer S. Rawlin; Ms. Muddam Mounika; Mr. Ramaswamy Shanmugam

doi:https://doi.org/10.17492/mudra.v4i01.9779

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Comparative Analysis of Top Private Sector Banks in India based on CAMEL Parameters

Rajveer S. Rawlin, Muddam Mounika, Ramaswamy Shanmugam

Vol 4, Issue 1, January - June 2017 | Pages: 58-69 | Research Paper

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https://doi.org/10.17492/mudra.v4i01.9779

Published Online: June 18, 2017

Author Details ( * ) denotes Corresponding author

1. * Rajveer S. Rawlin, rajveer@msrim.org, Ramaiah Institute of Management, Bangalore, Karnataka, India (rajveer@msrim.org)

2. Muddam Mounika, Graduate student, Ramaiah Institute of Management, Bangalore, Karnataka, India (mounika93m@gmail.com)

3. Ramaswamy Shanmugam, Visiting Professor, PSG Institute of Management, Coimbatore, Tamil Nadu, India (ramshanmugam@yahoo.co.in)

The CAMEL rating is a well-established technique to compare the performance of banks and financial institutions. The Compound Annual Growth Rate (CAGR) is a very useful growth measure. We compare the top five private sector banks in India, ranking them via the CAMEL rating based on the CAGR of CAMEL parameters. Of the banks chosen for the study, IndusInd bank ranked first in capital adequacy, asset quality and earnings quality. HDFC bank ranked first in management efficiency and Axis bank ranked first in liquidity. The bank with the best overall CAMEL rank proved to be IndusInd bank. By providing a basis of comparison for different banks, the CAMEL rating can yield valuable insight to several stake holders of banks such as top management, investors and regulators.

Keywords

CAMEL rating; Banks; Capital adequacy; Asset quality; Management efficiency; Earnings quality; Liquidity

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