It is imperative for any bank to maintain depositor's confidence and prevent the bank from going bankrupt. Capital is regarded as a cushion to protect depositors and promote the stability and efficiency of any financial system. Capital Adequacy reflects the overall financial condition of banks and also the ability of the management to meet the need for additional capital. Similarly, quality of assets is an important parameter to measure the strength of the bank. The prime purpose behind measuring the asset quality is to ascertain the component of non-performing assets (NPAs) as a percentage of the total assets. This signifies what type of advances the bank has made to generate interest income. In this article, an effort has been made to compare the performance of selected banks on two parameters viz. capital adequacy and asset quality in two periods ranging from 2002–2006 and from 2007–2011.
