Performance measurement system in indian banking sector in camel framework a comparative study of private and foreign banks in India

The Banking sector is a crucial linkage between the household sectors and firms and forms the backbone of an economy. It forms the basis for all the productive activities taking place in an economy and the performance of the economy is judged by the performance of its banking sector. The banking sector constitutes a major part of the financial service sector and its soundness is necessary for healthy, dynamic, growing, and vibrant economy. A sound and healthy banking sector ensures an efficient, profitable, stable, flexible, and productive economy.

The present research work has been undertaken to measure the performance of the banking sector in India by analyzing the performance of Private and Foreign banks with the help of CAMEL MODEL Approach. The Camel Model approach incorporates important parameters like Capital Adequacy, Assets Quality, Management Efficiency, Earnings Quality, and Liquidity.

The data was collected from the annual reports of five private banks and five foreign banks in India covering the period of five years starting from 2007–08 to 2011–2012 and the data analysis was conducted by using Analysis of Variance (ANOVA)-Two way classification model and is analytical in nature. The study reveals that among the private banks performance of ICICI Bank was the best and among the foreign banks performance of Antwerp Diamond Bank was best.