A CAMEL Model Analysis of State Bank Group

Abstract

The economic importance of banks to the developing countries may be viewed as promoting capital formation, encouraging innovation, monetization, influence economic activity and facilitator of monetary policy. Performance evaluation of the banking sector is an effective measure and indicator to check the soundness of economic activities of an economy. In the present study an attempt was made to evaluate the performance & financial soundness of State Bank Group using CAMEL approach. It is found that in terms of Capital Adequacy parameter SBBJ and SBP were at the top position, while SBI got lowest rank. In terms of Asset Quality parameter, SBBJ held the top rank while SBI held the lowest rank. Under Management efficiency parameter it was observed that top rank taken by SBT and lowest rank taken by SBBJ. In terms of Earning Quality parameter the capability of SBM got the top rank while SBP was at the lowest position. Under the Liquidity parameter SBI stood on the top position and SBM was on the lowest position. SBI needs to improve its position with regard to asset quality and capital adequacy, SBBJ should improve its management efficiency and SBP should improve its earning quality.

Keywords: State Bank Group, CAMEL and Performance Evaluation

JEL Classification: G21, G24 and L25