Comparative Analysis of Capital Adequacy & Earnings Capacity of Select Public & Private Sector banks of India based on CAMEL Approach

Nitin R. Suba

doi:10.53573/rhimrj.2023.v10n05.002

Authors

Prof. Dr. Nitin R. Suba Asst. Prof and Head – Commerce Department, Smt. C. P. Choksi Arts and Shree P. L. Choksi Commerce College, Veraval

DOI:

https://doi.org/10.53573/rhimrj.2023.v10n05.002

Keywords:

CAMEL approach, public and private sector banks, T-test, Capital Adequacy, Earnings Capacity

Abstract

The objective of this paper is to perform comparative analysis of the financial performance of 5 public and 5 private sector banks of India over a period of five years i.e. (2008-09 to 2012-13). For this purpose, CAMEL approach has been used. CAMEL is an acronym for measures Capital adequacy, Assets quality, Management soundness, Earnings, and Liquidity.

Out of five, two measures are taken for analysis i.e. Capital Adequacy and Earnings Capacity. Ten commercial banks were selected purposively for the study. The ratios depicting the CAMEL parameters were calculated based on the publicly available information published at Reserve Bank of India, Indian Bankers’ Association, annual reports of respective banks and Moneycontrol.com.

T Test has been applied to test four hypothesis and findings have been statistically counted.

From the aforementioned, summarized findings, we can clearly note that private sector banks do well in terms of both indicators of financial performance.

Private sector banks capital adequacy is more than public sector banks.
Private sector banks earn more profit margin than public sector banks.

It is found that public sector banks provide more net worth to the shareholders with compare to private sector banks.

Author Biography

Prof. Dr. Nitin R. Suba, Asst. Prof and Head – Commerce Department, Smt. C. P. Choksi Arts and Shree P. L. Choksi Commerce College, Veraval

Dr. Nitin R. Suba is working as Asst professor and head of commerce department at Shee Choksi Arts and Commerce College, Veraval (Gir Somnath). He holds doctoral degree in the field of commerce with subject of financial performance analysis of public and private sector banks since 2016. He has extended his doctoral research in the form of research papers and articles related to banking. Dr. Nitin has also done M.Phil. with specialization of Financial Management prior to Doctoral from Madurai Kamraj University, Madurai. He cleared UGC-NET in 2012. His basic qualification consists B.Com. with Accounting and M.Com. with Costing. Apart from Commerce, he holds C1 certificate in SCOPE.

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http://rbi.org.in/Scripts/PublicationsView.aspx?id=14705

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