Financial performance analysis of RRBs of Gujarat state-An application of camel model

Out of the total population of India, more than 70% people are living in rural area and such of them are very remote. Major population of these areas are depends on agriculture. To make sustainable economic growth, the focus must be given on agriculture and rural economy. Among the different requirements for the development of rural economy, the right type of credit and availability of that credit at proper time is very important. RRBs of India have been setup in rural areas where the reach of co-operative banks and commercial banks are distinct. The main objectives of these banks are to give finance to agriculture and to provide employment to the people of rural and remote areas of the country. RRBs have been conceived the strong points of commercial banks and co-operative banks and reducing the weak points of both. The objectives of the study are to evaluate the performance of Dena Gujarat Grameen Bank by applying CAMEL Model which is basically a ratio-based model for evaluating the performance of the banks periodically. Various ratios forming this model have been explained individually and collectively. In the present study, the ratios relating to capital adequacy, asset quality, management efficiency, earning quality and liquidity has been found out for the post-merger period. On the basis of the ratios and the trend line chart of the ratios, it is found that how the bank has performed after post-merger period i.e., 2006 to 2012 for fulfillment of the established objective of RRBs as well as profitability.