Comparison of Public and Private Sector Banking Performance Using CAMELS Ranking

Abstract

This study presents a comparison between the public sector and private sector banks in India using the CAMELS framework. The CAMELS methodology provides a broader view of bank performance than unidimensional ratios such as return on equity, particularly as it takes account of both profitability and risk factors in representing bank performance. The study uses CAMELS rankings as the basis for the comparison. Correspondingly, non-parametric statistical techniques are applied for the analysis, viz. the Friedman test and the Mann-Whitney test. The results of the study suggest that the private sector banks perform better than their public sector counterparts. These results are statistically significant and consistent over the research period.