Relative Performance Analysis of Scheduled Commercial Banks in India : A CAMEL Model Approach

Sahota, Shilpa; Dhiman, Babli

doi:10.17010/ijf/2017/v11i5/114251

Cited by 10 publications

(8 citation statements)

References 1 publication

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“…Factors such as bank size, asset management, and operational efficiency influence profitability and performance, as found by Tarawneh (2006), Siddiqui andShoaib (2011), andSahota andDhiman (2017). Dhungana (2013) emphasizes the importance of upholding international competitiveness norms and Karki (2018a) claims that earnings per share (EPS) is the best market performance indicator for banks for Nepalese banks, as such CAMEL ratings serve as an oversight mechanism for banks in Nepal.…”

Section: Literature Reviewmentioning

confidence: 99%

CAMELS Analysis and Market Stress Testing of Top Nepalese Banks

Karki,

Rajbhandari

2020

J. Devpt & Admin. Stud.

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This study presents a comprehensive study of the financial stability and resilience of commercial banks in Nepal using the CAMELS approach and market stress testing. The study analyzes the performance of sample banks and examines the relationship between CAMELS variables and bank performance. The results highlight five key factors influencing bank performance in Nepal: capital adequacy (CA), asset quality (AQ), management quality (MQ), liquidity (LQ), and sensitivity to market risks (SQ). These factors have a direct influence on performance i.e. earnings per share (EPS) of the banks. Multiple regression analysis confirms significant relationships between EPS and CA, AQ, MQ, LQ, and SQ, with no significant relationship with earnings quality (return of assets; ROA). Variance inflation factor analysis confirms no multicollinearity among the variables. The study conducts stress tests on market risks such as interest rate changes, exchange rate shocks, and equity shocks to assess and measure the risks associated with market uncertainties. The findings demonstrate that top-performing banks can maintain their Capital Adequacy Ratio (CAR) above 11% under different base rate changes, showcasing their ability to maintain the required level of soundness for operations. Considering all aspects of the CAMELS analysis and market stress testing, NABIL Bank emerges as the top-performing bank, followed by Nepal Investment Bank. This research holds significant importance in assessing the financial stability and resilience of commercial banks in Nepal. The findings provide valuable insights for decision-makers in the banking sector to identify areas for improvement, contributing to a robust financial system. It also contributes to financial performance evaluation literature for researchers, policymakers, and banking industry stakeholders.

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Section: Literature Reviewmentioning

confidence: 99%

CAMELS Analysis and Market Stress Testing of Top Nepalese Banks

Karki,

Rajbhandari

2020

J. Devpt & Admin. Stud.

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“…This level of soundness also reflects the financial position of the institution [10] [11]. Therefore, periodic analysis must be carried out, to anticipate possible vulnerabilities [12]. Various methods such as the CAMEL method, RGEC, fuzzy zero-order Takagi-Sugeno-Kang (TSK) and Risk Based Bank Rating can be applied to measure the level of health, taking into account different factors and conditions.…”

Section: Introductionmentioning

confidence: 99%

Design of Risk Rating Applications for Village Credit Institutions

Susanti¹,

Karma²,

Dewi³

2022

Advances in Social Science, Education and Humanities Research

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The Covid-19 pandemic has had a profound impact on the economic capacity and purchasing power of the general public. This condition automatically affects the ability of the people to fulfill their obligations, especially paying off the credit they have already taken. Credit has the potential to become bad credit. On the other hand, some people have started withdrawing their savings and deposits. This situation is certainly very worrying for financial institutions, especially the Village Credit Institution (LPD), which is the backbone of the economy of traditional village communities in Bali. LPDs must be managed with care. In this prudence, the manager in addition to maintaining the level of health, is also required to monitor the level of risk of his LPD. This risk rating becomes important in conducting supervision, prudence and anticipation in the operational management of the LPD. This research was conducted in an effort to help LPD prepare an information system for assessing the level of risk for its institution. The research was conducted using the Waterfall system development stages, with an objectoriented approach. At the initial stage, this research focused on designing the required information system, through the stages of object-oriented analysis and design (OOA and OOD). The resulting design is a component of the system, which can later be used as a reference in the final stages of system development, namely the object-oriented programming (OOP) stage.

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“…This level of soundness also reflects the financial position of the institution (Rauf, 2016;Lisa & Hermanto, 2021). Therefore, a periodic analysis must be carried out to anticipate possible vulnerabilities (Sahota & Dhiman, 2017). Various methods such as the CAMEL method, RGEC, fuzzy zero-order Takagi-Sugeno-Kang (TSK) and Risk Based Bank Rating can be applied to measure the level of health, taking into account different factors and conditions.…”

Section: Introductionmentioning

confidence: 99%

A Health Level and Risk Rating Monitoring System of Village Credit Institutions

Karma¹,

Sulastra²,

Dewi³

2022

irjmis

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As a financial institution that is very vulnerable to negative issues, Bali Governor Regulation No 44/2017, which regulates the management of an LPD (Village Credit Institution) directs that LPDs be managed carefully. Performance indicators that must be considered are the level of health and risk rating of the LPD, which are determined by a number of factors/components related to the financial condition and procedures for managing the LPD. The procedure for determining it is clear, but requires careful calculations and seems difficult for those who do not understand it. Knowledge of the level of health and risk rating will make it easier to find alternative solutions when the LPD has problems. Building a health level and risk rating monitoring system is a solution. The system is built using the Waterfall method with an object-oriented system approach. This system will greatly assist the manager and the supervisory team to maintain good LPD performance, and can quickly anticipate situations that cause the LPD's performance to decline, which is shown from the factors/components of the health level monitoring results and risk ratings by this system.

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Relative Performance Analysis of Scheduled Commercial Banks in India : A CAMEL Model Approach

Cited by 10 publications

References 1 publication

CAMELS Analysis and Market Stress Testing of Top Nepalese Banks

CAMELS Analysis and Market Stress Testing of Top Nepalese Banks

Design of Risk Rating Applications for Village Credit Institutions

A Health Level and Risk Rating Monitoring System of Village Credit Institutions

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