Financial Performance Analysis of New Generation Private Sector Banks: A Camel Model Approach in Indian Context

Abstract

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The banking sector in Indian context has been witnessing several dynamic changes from time to time. It forms an imperative constituent of any financial & economic system. The predominance of public sector banks (PSBs) in the industry has reduced considerably as private sector banks (PVBs) are accomplished to build up a sound position within the industry by utilizing technology and skilled management. The Indian banking sector has been experiencing several dynamic structural changes with the introduction of new generation banks in the private sector. Over time the ranking and position of banks have changed due to the change in the banks’ performance. The research article aims to measure the performance of the new generation private banks in India using the CAMEL model approach. The research study used secondary data. Selective ratios representing the CAMEL model are employed to scrutinize and compare the performance of the ten private banks-ICICI, Axis, HDFC, YES, Kotak Mahindra, IndusInd, IDBI, Bandhan, IDFC FIRST and DCB. The data has been collected from MoneyControl and annual reports of respective banks over five years (from 2014-15 to 2018-19). Based on the overall rank, the study has found that the Bandhan bank is leading followed by HDFC bank and others. Based on one way ANOVA, the study found considerable variation in the performance across the banks. The study may be beneficial to the stakeholders in taking suitable decisions related to these banks.

Keywords: New Generation Private Banks, Performance Analysis, CAMEL Model, Ratios

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