The Financial performance of Selected Public Sector and Private Sector Banks in India -A comparative study using CAMEL model

In today's scenario, the banking sector is one of the fastest growing sectors and banking sector plays a major role in economic development by channelizing savings into investment. Also, today's banking system is becoming more complex. So, I thought of evaluating the performance of some selected public sector and private sector banks in India. There are so many models of evaluating the performance of the banks. Out of these CAMEL model has been considered as one of the widely used tools for judging Capital Adequacy, Asset Quality, Management Efficiency, Earnings Quality, and Liquidity of the financial institutions including commercial banks.

This paper examines the comparative performance of leading public and private sector banks, i.e. HDFC Bank and ICICI Bank from Private Sector and State Bank of India and Punjab National Bank from the public sector. Data have been collected though annual reports of the consecutive five years i.e. from 2012–03 to 2016–17 of all the banks. Then CAMEL ratios are calculated ratios and interpreted. Ranking of the banks are done by calculating the average of the five years ratios. From the analysis it is found that the private sector banks’ performance is better than the public sector banks. !nd an interesting result is found that the overall performance of both the private sector bank is equal as well as the overall performance of both the public sector bank is also equal.