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COMPARATIVE STUDY OF PERFORMANCE OF INDIAN BANKS USING

CAMEL MODEL
Dr. Gurpreet Singh Arora
Director, SKIPS.

Dr. Ankit Jain

Associate Professor, SKIPS.

Abstract:
In terms of nominal GDP, India is now the world's sixth-largest economy, and third-largest in terms of purchasing power
parity. According to several predictions, India's growth rate will settle at 8% in the coming decades, making it the world's
fastest-growing economy. The financial sector is extremely important for economic growth. The banking sector is particularly
significant in the financial sector. It is necessary to assess the banking sector's performance on regular basis. The major goal
of this research work is to use important banking ratios to determine the financial position and efficiency of public and private
sector banks. The ranks are assigned using the CAMEL Model. It is found that private banks capital adequacy, asset quality,
managerial performance and earnings except liquidity levels were deemed to be adequate, whereas public sector banks'
circumstances were deemed to be poor, according to the rating. In every category, HDFC and Kotak Bank are at the top except
liquidity level while PNB, IDBI, and Union Bank are at the bottom. It is also found that there is significant difference in
performance between public and private banks.
Keywords: CAMEL Model, Key Performance Indicator, Banking Sector.

Introduction:
India is now the world's sixth-largest economy in terms of nominal GDP and third-largest in terms of purchasing power parity.
Several reports predict that India's growth rate will stabilize at 8% over the next few decades, making it the world's fastest-
growing economy. Before 2050, India's GDP could surpass that of the United States, making it the world's most powerful
economy. Young population and an increasingly rising population of working-age people, boost in manufacturing development
due to growing educational and technological skill levels and rapidly expanding middle class, resulting in continued consumer
market expansion are India's main growth factors.
Prime Minister Narendra Modi has set a lofty target of making India a $5 trillion economy by 2025. Reaching the aim will be
beneficial to the people of India as well as the rest of the world. It would necessitate even more tax, trade, infrastructure, and
government structure reforms. It would also necessitate a large and stable financial sector, as well as significant progress on
financial reforms.
The banking sector is critical in providing financial support to all aspects of our economy, including individuals and businesses.
The Indian economy's financial growth would have been impossible to achieve without the banking system. Banks in the
United States, Canada, the United Kingdom, Japan, India and several other European countries played a critical role in
stabilizing the economy and transmitting government stimulus and relief services during this epidemic. The Indian economy's
financial growth would have been impossible to achieve without the efficient banking system. The Basel Committee on
Banking Supervision (BCBS) developed a systematic, versatile, and risk-sensitive system known as Basel norms to improve
the soundness and stability of banks.
Banks help to expand the economy in a variety of ways. They are important credit generators for the economy, and they operate
in unique ways. People put their money in banks, which are then channeled to entities/individuals in need of money through
various types of loans. Furthermore, people use the loan proceeds to make savings, which creates additional revenue for the
economy. Banks raise money for the economy in a variety of ways, in addition to credit-creation techniques. One example
may be the revenue generated from lending services to the country's citizens. In this situation, bank employees' earnings in the
form of salaries and other benefits also contribute to the broader GDP pool. Furthermore, any expenditure incurred by banks
in the form of various expenses, leases, stationery, internet costs, and so on, adds to the country's GDP inevitably. This research
paper attempted to determine the performance of various banks in the year 2019-20 using the CAMEL model. It was very

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important year for the economy. In this year Reserve Bank of India tried to implement BASEL III norms in banking sector.
For a developing economy banking sector is very important. Take a look back to 2008, when the financial crisis in the United
States spread havoc around the globe. The United States is still attempting to re-establish economic growth. One of the biggest
catastrophes a country may face is a banking crisis. The goals of the BASEL norms are to strengthen the banking industry to
resist economic and financial stress, minimize system risk, and promote bank transparency. Until BASEL III, the norms had
only considered some of the risks related to credit, the market, and operations. To meet these risks, banks were asked to
maintain a certain minimum level of capital and not lend all the money they receive from deposits. This acts as a buffer during
hard times. The BASEL III norms also consider liquidity risks.
The study has been carried out as follows: the present section gives the introduction about the present research work. The
second section discusses a literature review on research work carried out on banking industry. The third section outlines the
methodology of the present study. The fourth section discusses the result and the last part of the study outlines the conclusion.

Review of literature
Since the 1980s, huge loan losses and bank collapses have caused banking supervision to become increasingly concerned. In
light of the global banking crisis, CAMEL is a useful tool for examining the safety and soundness of banks and assisting in the
mitigation of potential risks that could result in bank collapses. The research was carried out as part of an American
International Assurance Vietnam case study (AIA). Its objective is to see whether CAMEL framework plays an important role
in banking supervision or not. According to the findings, the CAMEL rating system is a helpful supervisory tool in the United
States. The CAMEL analysis technique is advantageous since it is an internationally accepted rating. As a result, it is the
primary model used to evaluate banks' performance (Uyen, 2011) In a research conducted in 2019, it was discovered that
HDFC Bank, a private sector bank, placed first overall, followed by SBI and PNB, both in second place, and Kotak Mahindra
Bank, in third place. The results of hypothesis testing show that there is no substantial difference in performance between
public and private sector banks operating in India (Kumar, 2019) Due to the strategic importance of banks in national
economies, the CAMEL rating system is a popular tool for assessing bank soundness in a number of economic and institutional
settings (Maude & Dogarawa, 2016)
A study conducted on Financial Analysis of Select Banks Using Camel Approach in the year 2016. He found that total
advances-to-total deposits ratio, profit per employee, debt-equity ratio, net NPA’s-to-total advances ratio are the major factors
impacting the financial performance of the banks (Meena, 2016).The performance of public and private sector banks measured
from year 2012-2017 by using the CAMEL Approach. The results showed that private sector banks are found to be better
performer than public banks. Union Bank, Bank of Baroda, PNB, and Canara Bank were in the below average category
(Panboli & Birda, 2019),while HDFC and AXIX bank were in the above average category The elements that have the greatest
impact on the financial performance of banks during the research period are capital sufficiency and asset quality (Ahamed,
2016).
The performance of five private sector banks was examined from 2007 to 2011. To investigate banking results, financial
indicators such as capital adequacy ratios, asset quality ratios, management efficiency ratios, earnings quality ratios, and
liquidity ratios were employed. All five banks were able to keep their CAR above the ten percent threshold. However, with a
growth rate of more than 18 percent over the last five years, Kotak Mahindra bank has maintained the greatest rate of growth.
It's a really good sign that banks will be able to grow and thrive in the future. For six of the 20 ratios considered in the CAMEL
model, Kotak Mahindra Banks had the highest average results, followed by HDFC Bank (5 ratios). As a result, the finest
private sector bank has been found to be Kotak Mahindra Bank (Mathiraj, 2014) Private-sector banks must boost their liquidity
results, whereas public-sector banks must concentrate on capital adequacy, asset quality, management productivity, and
earnings quality (Kiran, 2018) The data demonstrate that the CAMEL ratios of all Public Sector Banks in India vary statistically
significantly, meaning that their overall production differs. Furthermore, in order to fulfil the desired expectations, the banks
with the lowest rating must improve their efficiency (Gupta, 2014).
Private sector banks outperformed public sector banks in terms of capital adequacy and asset quality. In terms of management
efficiency and earnings, however, the banks in both sectors performed admirably. Public sector banks also outperformed
private sector banks in terms of liquidity and sensitivity analyses. As a result, it can be stated that public sector banks have
preserved their long-term solvency. Because these banks rely on capital rather than deposit funds to sustain liquidity, they are
vulnerable to nonperforming assets (NPAs). Private sector banks, on the other hand, maintained significant capital adequacy
and asset quality, which contributes to the banks' long-term solvency and profitability. However, private sector banks rely
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heavily on deposit funds, which signals illiquidity and has a greater impact on the bank's profitability (Banu & Vepa, 2021)
The existence of consistency among the Banking sector and suggested investors follow perfect portfolio management to avoid
the risk involved in it (Prabhakar & LakshmiPrabha, 2012). The Banks can be classified based on banks profitability and
efficiency between small and large banks (Spathis & Doumpos, 2002). Public sector banks outperform private sector banks in
terms of overall performance. (Kaur, 2012). Private sector banks can also play an important role in the development of the
Indian economy (Balasubramanin, 2007). Deposits, profitability, return on assets, and productivity are all financial indicators
that can be used to assess a bank's financial success. (Pathak, 2003). Financial measures such as liquidity, capital adequacy,
and profitability ratios show that the global crisis had no significant impact on Indian banks from 2006 to 2009. (Goel &
Bajpai, 2013). Foreign bank groups performed substantially better than other banking sectors prior to the global recession.
(Yadav, 2014). The study's findings demonstrate that banks' profitability was reasonable and maintained at a moderate pace
during the study period. During the period bank increased interest covering ratio and maintained debt-equity ratio over 1:1
which showed strong solvency position of the banks. Correlation between return on net worth and the debt-equity ratio was
negative during the study period. Even interest income to working funds also had a negative association with the interest
coverage ratio. It was also revealed from the study that the Non-Performing Assets to net advances was negatively correlated
with interest coverage ratio (Singla, 2008) and even Bank with better efficiency does not always mean that it has better
effectiveness (Chien & Danw, 2004). A few thinks about recommended that an effective administration data framework ought
to be created. The bank staff included in endorsing the progresses ought to be prepared approximately the correct
documentation and charge of securities and persuaded to require measures in anticipating progresses from turning into NPA.
Public banks must pay consideration to their working to compete with private banks. Banks ought to be well versed within the
appropriate choice of borrower/project and in analyzing the money related explanation (Chaudhary & Sharma, 2011). The
study by (Kumar & Malhotra, 2013) found that Bank of Baroda was at the primary position with an in general composite
positioning normal of 6.05 due to its superior execution within the zones of liquidity and asset quality, closely taken after by
Andhra Bank with an by and large composite ranking average of 6.15 since of its quality within the circles of administration
productivity, capital ampleness and asset quality. United Bank of India held the bottom-most rank with an overall composite
ranking average of 14.60 due to management inefficiency, poor assets and earning quality. The study recommends that the
United Bank of India has to improve its management efficiency, assets and earning quality. Similarly, the Bank of Maharashtra
ought to take essential steps to progress its liquidity position and management proficiency. The study by (Mohanraj & Gomathi,
2013) finds that the keeping money segment faces benefit weights due to higher financing costs, mark-to-market necessities
on speculation portfolios, and resource quality weights due to an abating economy. But Indian banks’ worldwide presentation
is moderately little, with worldwide assets at around 6 per cent of the entire assets. The robust economic growth in the earlier,
low defaulter ratio, absence of complex financial instruments, continuous intervention by the central bank, proactive
modification of monetary policy and so-called close banking culture has favoured the banking industry in India in recent global
financial turmoil. The study found that Return on Assets and Interest Income Size have a negative correlation with operational
efficiency, whereas positive correlation with Assets Utilization and Assets size. It is also exposed from the research that there
exists an influence of operational efficiency, asset management and bank size on the financial performance of the Indian Private
Sector Banks. (Mistry & Savani, 2015). The study found that a significant positive relationship exists between the size of the
selected public and private sector banks and the degree of corporate social disclosures. It is also found that a significant positive
relationship exists between the return on assets and the level of corporate social disclosure of the selected public and private
sector banks under the study (Mistry, 2014), (Mistry, 2012) (Mistry, 2011).
From the above review of empirical works, it is clear that no specific research has been done on the performance of public and
private sector banks for the year 2019-20. Most of the researchers have taken into account for longer period prior to that. Here
only one year has taken 2019-20 for the study. All the researchers have conducted analysis on the basis of the secondary data.
Literature review gives an idea of extensive work on CAMEL model to know the efficiency of banking sector. It has been
noticed that most of the studies said that private sector banks outperformed public sector. But if we see components of CAMEL
model private sector banks outperformed public sector banks in terms of capital adequacy and asset quality. In terms of
management efficiency and earnings, however, the banks in both sectors performed admirably. Public sector banks also
outperformed private sector banks in terms of liquidity and sensitivity analyses.

Research Problem: The survey of the existing literature reveals that no specific work has been carried out to examine the
performance of public and private sectors banks for the year 2019-20. The present study is an attempt in this direction and
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therefore, aims to enrich the literature on the comparative study on performance of public and private sector banks.

Research Question: The present study is an attempt to find the answer to the following research questions. Are there any
difference in public and private sector banks performance, if there is any difference, which components are stronger for private
and public banks?

Research Objectives:
Primary Objective
• To Study of Performance of Indian Banks using CAMEL Model
Secondary Objectives
• To know the financial position and efficiency of the selected public and private sector banks in India
• To compare average score of CAMEL rating of public and private sector banks.

Research Methodology
Sources of Data: The current research is primarily based on secondary data. The data was compiled using the RBI website,
money management, bank websites, annual reports, equity master, economic times, and a variety of journals and research
papers.
Period of Study: It covers data for a single fiscal year (2019-20). In this year Reserve Bank of India gave deadline for adoption
BASEL III norms in banking sector. For India's banks, complying with BASEL III rules is a difficult process, as they must
enhance capital, liquidity, and lower leverage. This could have an impact on Indian banks' profit margins. Furthermore, putting
more money aside as capital or liquidity limits a bank's ability to lend money. The largest source of profit for banks is loans.
Banks in India must meet both the LCR and the RBI's Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR)
requirements. This would necessitate additional money being set aside, further straining balance sheets.
Sampling: Judgmental Sampling Method has been used to select the samples. The Samples so selected represented the banking
sector in India. Five banks from both the public and private sectors were chosen for this analysis, and their main ratios were
examined using the various parameters of the CAMEL model.
Research technique
Internationally accepted CAMEL model was used to assess the financial soundness of selected public and private sector banks.
CAMEL is an acronym for five parameters (capital adequacy, assets quality, management soundness, earnings and liquidity).
On the basis of rating, comparative study of performance of public and private sector banks has been done.
Hypotheses
Following hypotheses have been framed for the present study:
H0: There is no significant difference in mean score of camel rating in public and private sector banks.
H1: There is significant difference in mean score of camel rating in public and private sector banks.

Result and discussion

I Capital Adequacy Level
Depositors' risk perceptions of financial institutions are influenced by the capital base of the institution. Maintaining sufficient
levels of capitalization is also a major constraint for financial managers. The level of capital adequacy is one of the indicators
of a bank's ability to absorb a sufficient amount of loss. Capital adequacy is critical for a bank to maintain and protect its
stakeholders' confidence and avoid bankruptcy. To know capital adequacy level, Capital adequacy ratio, Total Advances to
Total Assets, Debt equity ratio and Financial Charges Cover ratio were used. The Basel III norms stipulated a capital to risk
weighted assets of 8%. However, as per RBI norms, Indian scheduled commercial banks are required to maintain a CAR of
9% while Indian public sector banks are emphasized to maintain a CAR of 12%.

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Table 1 Capital Adequacy Level

Capital Rank Total Financia
Adequac Advance Debt l
y s Equity charges
Banks ratio to total Rank ratio Rank cover Rank Composite Rank
HDFC 17.11 2 65 2 0.74 2 1.48 1 1.75 1
AXIX 15.84 4 62 3 0.37 1 1.06 6 3.5 3
Kotak 17.45 1 61 4 0.99 3 1.47 2 2.5 2
IndusInd Bank 14.16 5 67 1 1.75 8 1.28 3 4.25 4
ICICI 16.89 3 59 6 1.622 7 1.21 4 5 5
SBI 12.72 7 58 7 1.294 5 1.11 5 6 7
IDBI 11.58 9 43 10 1.89 9 0.1 10 9.5 10
PNB 9.73 10 56 9 7.266 10 1.03 8 9.25 9
Union 11.78 8 57 8 1.53 6 0.9 9 7.75 8
Bank of baroda 13.42 6 60 5 1.07 4 1.05 7 5.5 6
It is revealed that on the basis of a composite score of capital adequacy ratio, total advances to total assets ratio, debt equity
ratio, and financial charges ratio, Table 1 shows that HDFC was first in capital adequacy level, followed by Axis and Kotak
bank, and IDBI and PNB bank were at last. All private and public sector banks met the Reserve Bank of India's capital adequacy
requirements. PNB bank has a very high debt equity ratio, they should try to reduce it otherwise they will have a problem of
liquidity.

II Asset Quality
A bank's assets include all of the various types of loans it makes to borrowers as well as other investments it makes in relatively
risk-free instruments like government bonds and corporate bonds. The term asset quality refers to the quality of loans issued
by a bank. If a bank's loans are being repaid on time, it is said to have high-quality assets. Loans that are not paid on time are
examples of poor-quality assets. The metric Non-Performing Assets is a significant indicator of a bank's asset quality (NPAs).
With this indicator, the asset quality is measured with respect to the level and severity of non-performing assets, adequacy of
provisions, distribution of assets etc. To assess asset quality for the analysis, Net NPA to Net Advances, Net NPA to Total
Asset and Total Investment to Total Asset Ratio have been taken into account.
Table 2 Asset Quality Level
Net NPA Total
to net Net NPA Investment
Advances to total asset to total Composite
Banks (in%) Rank (in%) Rank asset ratio Rank A Rank
HDFC 0.39 1 0.23 1 0.26 6 2.67 2
AXIX 2.2 4 2.27 2 0.17 1 2.33 1
Kotak 0.75 2 0.43 3 0.2 3 2.67 2
IndusInd Bank 1.21 3 0.61 4 0.19 2 3.00 3
ICICI 2.29 5 0.9 5 0.22 4 4.67 4
SBI 3.01 6 1.31 6 0.265 7 6.33 5
IDBI 10.11 10 1.81 7 0.276 8 8.33 7
PNB 6.56 8 3.27 10 0.28 10 9.33 9
Union 6.85 9 3.14 9 0.278 9 9.00 8
Bank of baroda 3.33 7 1.86 8 0.23 5 6.67 6
It can be seen that Axis bank was at first place in asset quality, followed by HDFC and Kotak Bank, based on the composite
score (Table 2) of net NPA to net advances, net NPA to total assets, and total investment to total ratio. Union, IDBI and PNB
bank were having poor-quality assets. This is a challenge that all public sector banks face, and it has an effect on their
profitability and long-term viability in the industry.

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III Management Efficiency

Another essential component of the CAMEL system is management performance, means the bank's leadership, innovativeness,
and administrative competence, as well as adherence to established norms, the ability to prepare and be constructive in a
competitive world. To measure management efficiency, Profit per Employee, Business Per Employee, Return on Net Worth,
Total Advances to Total Deposits and Credit Deposit Ratio have been used.
Table 3 Management Efficiency Level
Total
Profit per Business Advances to
Employee per total Credit
(in Rupees employee (in Return on deposits Deposit
Banks lakh) Rank rupees lakh) Rank Net worth Rank Rank Ratio Rank Composite Rank
HDFC 23 1 1687 5 16.5 1 86% 3 88.76 5 3 1
AXIX 7.61 5 1653 7 7.19 4 89 2 90 3 4.2 2
Kotak 12 2 996 10 12.11 3 83.00 5.00 91.06 2 4.4 3
IndusInd Bank 11.9 3 1346 8 13.07 2 102 1 95.65 1 3 1
ICICI 4 6 1222 9 3.15 5 84 4 89.35 4 5.6 5
SBI 0.33 7 1877 4 0.39 7 71 7 75.08 6 6.2 6
IDBI -88 10 2084 1 -51.4 10 58 10 64.56 10 8.2 8
PNB -15 9 1680 6 -23.24 9 67 9 67.79 9 8.4 9
Union -8 8 1879 3 -11.43 8 70 8 71.39 8 7 7
Bank of baroda 8 4 1888 2 0.97 6 73 6 73.4 7 5 4
Interpretation: On the basis of composite score of profit per employee, business per employee, return on net worth, total
advances to total deposits and credit deposit ratio HDFC and IndusInd bank at first rank followed by Axis and Kotak bank.
IDBI and PNB were at lowest rank due to poor performance in management efficiency parameter.

IV Earning Quality
Earnings quality can used to assess a company's long-term sustainability. To expand its operations and retain its
competitiveness, a bank needs a fair return. Under difficult economic conditions, the analyst looks at the stability of earnings,
return on assets (ROA), net interest margin (NIM), and potential earning prospects. To assess earnings efficiency, Net Interest
Margin, Operating Profit to Total Asset and Return on Assets have been used.
Table 4 Earning Quality Level
Ratio of
net interest
Ratio of
income to
operating
total assets
Rank profits to total Rank
(Net
assets
Interest
Margin) Return on
Banks Assets Rank Composite E Rank
HDFC 4.18 1 3.44 1 1.9 1 1.00 1
AXIX 2.91 5 2.55 4 0.63 4 4.33 4
Kotak 3.9 2 2.89 3 1.69 2 2.33 2
IndusInd Bank 3.54 3 3.24 2 1.39 3 2.67 3
ICICI 2.93 4 2.54 5 0.39 5 4.67 3
SBI 2.48 7 1.55 8 0.02 7 7.33 6
IDBI 1.76 10 1.21 10 -4.68 10 10.00 9
PNB 2.23 8 1.69 7 -1.25 9 8.00 7
Union 2.08 9 1.53 9 -0.59 8 8.67 8
Bank of baroda 2.49 6 1.8 6 0.06 6 6.00 5
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Interpretation: Table 4 depicts the earning quality level parameter. According to first parameter HDFC bank had highest net
interest margin and lowest had IDBI bank. Second parameter shows ratio between operating profit and total assets, again
HDFC had first rank and IDBI at last. Third and last parameter was return on assets, again HDFC had high return and IDBI at
last. On the basis of composite score of all parameters HDFC was at first position followed by Kotak and IndusInd bank and
Union and IDBI at bottom, again the public sector banks were facing problems in earning quality.

V Liquidity
If the institution's liquidity status is adequate, it may raise funds by raising liabilities or rapidly converting its assets to cash at
a fair cost. Liquidity has been measured with Liquid Assets to Total Assets Ratio and Liquid Assets to Total Deposits Ratio.
Table 5 Liquidity Level
Banks Liquid Rank Liquid Rank Composite Rank
assets Assets to L
to toal Total Deposits
assets (in (in %)
%)
HDFC 3.52 9 4.69 9 9 9
AXIX 9.33 2 13.34 2 2 2
Kotak 2.924 10 4 10 10 10
IndusInd Bank 7.31 4 11.12 3 3.5 3
ICICI 6.91 5 9.85 4 4.5 5
SBI 7.32 3 8.93 5 4 4
IDBI 16.58 1 22.37 1 1 1
PNB 4.23 8 4.98 8 8 8
Union 4.25 7 5.18 7 7 7
Bank of baroda 5 .38 6 6.59 6 6 6
Interpretation: It is obvious from table no. 5 that IDBI bank had a lot of cash on hand. It means they aren't making the best
use of their money. HDFC and Kotak were at the bottom of the list. They made effective and productive use of the funds.

Composite ranking (Overall performance)

Table 6 Composite Ranking & Overall Performance
Banks Rank Rank Rank Rank Rank Average Rank
HDFC 1 2 1 1 9 2.8 2
AXIX 3 1 2 4 2 2.4 1
Kotak 2 2 3 2 10 3.8 3
IndusInd Bank 4 3 1 3 3 2.8 2
ICICI 5 4 5 3 5 4.4 4
SBI 7 5 6 6 4 5.6 6
IDBI 10 7 8 9 1 7 7
PNB 9 9 9 7 8 8.4 9
Union 8 8 7 8 7 7.6 8
Bank of baroda 6 6 4 5 6 5.4 5
The performance of private banks outperforms that of public sector banks, according to table 6. The average composite rank
of each parameter in the CAMEL model was used to measure it. In the private sector, Axis Bank, HDFC Bank, and IndusInd
Bank performed well in the years 2019-20. Bank of Baroda was one of the most successful public sector banks. PNB, IDBI
and Union Bank were not doing well in all the parameters of CAMEL. They must pay close attention to all parameters in order
to improve performance in the near future; otherwise, the government will think about privatization of public sector banks.

Results of Hypothesis:
For determining whether there is any significant difference between the means of CAMEL ratios of Public and Private
sector banks, we applied here t test which shown in the following table no 7 and 8.

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Table No. 7 Group Statistics

Banks Mean Std. Deviation N t value Remark
Private Sector 3.2400 .82946 5 -5.195 P >0.05
Public Sector 6.8000 1.28841 5

Table No. 8 Independent Sample test

Levene's Test t-test for Equality of Means
for Equality of
Variances
F Sig. t df Sig. (2- Mean Std. Error 95% Confidence
tailed) Difference Difference Interval of the
Difference
Lower Upper
Mean Equal 1.532 .251 -5.195 8 .001 -3.56000 .68527 - -
score variances 5.14024 1.97976
assumed
Equal -5.195 6.830 .001 -3.56000 .68527 - -
variances 5.18865 1.93135
not
assumed
From the above table no. 7 & 8, it is evident that the significance (2 – tailed) value is .001. It reflects that mean score of
camel rating of private and public banks differ significantly. In this context the null hypothesis is rejected and alternate
accepted. It is concluded that there is significant difference in performance of public and private sector banks.

Conclusion
The financial structure of the economy has a significant impact on a country's economic development. The banking sector is
an important part of the financial system. The CAMEL method is used in this paper to determine the financial performance of
banks for the year 2019-20. The capital adequacy, asset quality, management performance, earning, and liquidity levels of
private banks were found to be satisfactory, but the conditions of public sector banks were found to be unfavorable. PNB,
IDBI, and Union Bank are at the bottom of the list in every category, while HDFC and Kotak Bank are doing well in every
category except liquidity. They should keep a healthy amount of liquidity. According to the result of hypothesis, there is a
considerable difference in the performance of public and private banks. The current research has a small reach since it only
looks at ten banks (5 public and 5 private). This study's findings will aid policymakers and banks in improving financial
efficiency by focusing on weak metrics.

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