Open AccessComparative Analysis of Top Private Sector Banks in India based on CAMEL Parameters
Author(s) -
Rajveer Rawlin,
Muddam Mounika,
Ramaswamy Shanmugam
Publication year - 2017
Publication title -
mudra : journal of finance and accounting
Language(s) - English
Resource type - Journals
eISSN - 2395-2598
pISSN - 2347-4467
DOI - 10.17492/mudra.v4i01.9779
Subject(s) - asset quality , capital adequacy ratio , market liquidity , business , ranking (information retrieval) , non performing asset , asset (computer security) , earnings , quality (philosophy) , private sector , finance , financial system , economics , computer science , economic growth , profit (economics) , philosophy , computer security , capital asset pricing model , epistemology , machine learning , microeconomics
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.