Analytical Study Of Financial Performance Of Public And Private Sector Bank Using CAMEL Model

Abstract

The financial performance of public and private sector banks, evaluated using the CAMEL model (Capital Adequacy, Asset Quality, Management Quality, Earnings, and Liquidity), is crucial for maintaining a robust banking system. This model provides a comprehensive framework to assess the stability and efficiency of banks. For public sector banks, financial solid performance ensures their ability to support government initiatives and economic policies, while for private sector banks, it enhances competitiveness and market confidence. Capital adequacy reflects the bank's financial resilience, asset quality assesses the risk of default, management quality indicates operational efficiency, earnings showcase profitability, and liquidity ensures the bank can meet its short-term obligations. Together, these parameters help identify potential weaknesses, guide regulatory interventions, and foster a stable financial environment conducive to economic growth. The study is based on secondary data. The source of data is ‘capitaline’ website. The study include 5 public sector and 5 private sector banks. For the analysis of data SPSS software is used. Descriptive and inferential statistics are applied to study the objectives.