Black Book

Comparative Study of Selected Commercial Banks in India
A Project Submitted to
University of Mumbai for Partial Completion of the Degree of
Bachelor of Management Studies
Under the Faculty of Commerce
By
Bhavesh Singh
Under the Guidance of

Prof. Vinayak Parab
Smt. Mithibai Motibhen Kundnani College of Commerce & Economics
April 2021
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Smt. Mithibai Motibhen Kundnani College of Commerce & Economics
Certificate
This is to certify that Mr. Bhavesh Singh has worked and duly completed his
Project Work for the degree of Bachelor of Management Studies under the
Faculty of Commerce in the Subject of Finance and his project is entitled,
“Comparative Analysis of Selected Commercial Banks in India under my
supervision.”
I further certify that the entire work has been done by the learner under my
guidance and that no part of it has been submitted previously for any Degree
or Diploma of any University.
It is his own work and facts reported by his personal findings and
investigations.
Name and Signature of Name and Signature

College Principal Guiding Teacher
Seal of the
College
Date of Submission:
2
Declaration by learner
I the undersigned Mr. Bhavesh Singh hereby declare that the work embodied
in this project work titled “Comparative Study of Selected Commercials
Banks in India”, forms my own contribution to the research work carried out
under the guidance of Prof. Vinayak Parab is a result of my own research
work and has not been previously submitted to any other University for any
other Degree/Diploma to this or any other University. Wherever reference
has been made to previous works of others, it has been clearly indicated as
such and included in the bibliography.
I, hereby further declare that all information of this document has been
obtained and presented in accordance with academic rules and ethical
conduct.
Name and Signature of the learner
Certified by
Name and Signature of the Guiding Teacher
3
Acknowledgement
To list who all have helped me is difficult because they are so

numerous and the depth is so enormous.
I would like to acknowledge the following as being idealistic

channels and fresh dimensions in the completion of this project.
I take this opportunity to thank the University of Mumbai for

giving me chance to do this project.
I would like to thank my Principal, Dr. CA. Kishore Peshori for

providing the necessary facilities required for completion of this
project.
I take this opportunity to thank our Coordinator Dr.Sheetal

Chaddha, for her moral support and guidance.
I would also like to express my sincere gratitude towards my

project guide Vinayak Parab whose guidance and care made the project
successful.
I would like to thank my College Library, for having provided

various reference books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially my
Parents and Peers who supported me throughout my project.
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Contents
1 Introduction.............................................................................................................................7
1.1 Indian Banking Sector: A Brief History.......................................................................7
1.1.1 Pre-independence Era............................................................................................7
1.1.2 Post-independence Era:..........................................................................................8
1.1.3 Post-Reform Era...................................................................................................10
1.1.4 Performance of Commercial Banks during Post- Reforms Period..................14
1.2 Major 8 Banks of India............................................................................................15
1.2.1 Axis Bank Ltd........................................................................................................15
1.2.2 Bank of Baroda.....................................................................................................17
1.2.3 Central Bank of India...........................................................................................19
1.2.4 HDFC.....................................................................................................................21
1.2.5 ICICI Bank............................................................................................................23
1.2.6 IndusInd bank.......................................................................................................24
1.2.7 PNB........................................................................................................................26
1.2.8 SBI..........................................................................................................................28
2 Research Methodology.........................................................................................................33
2.1 Objective of the study.............................................................................................33
2.2 Significance of the study.........................................................................................33
2.3 Scope of the study..................................................................................................34
2.4 Limitation of the study............................................................................................34
2.5 Methodology..........................................................................................................34
2.5.1 Data Collection......................................................................................................34
2.5.2 Sample Size............................................................................................................35
2.5.3 Data Analysis.........................................................................................................35
2.5.4 Techniques and Tools used..................................................................................35
3 Review of Literature.............................................................................................................37
3.1 International Studies:..............................................................................................39
3.2 Indian Studies:........................................................................................................39
4 Data Analysis.........................................................................................................................40
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4.1 CAMELS Rating Model.............................................................................................40
4.1.1 Capital Adequacy..................................................................................................42
4.1.2 Asset Quality.........................................................................................................44
4.1.3 Management Efficiency........................................................................................46
4.1.4 Earnings Quality...................................................................................................49
4.1.5 Liquidity................................................................................................................51
4.1.6 Sensitivity to Market Risk:..................................................................................53
4.2 Overall Rating (as per CAMELS)...............................................................................54
4.3 EAGLES Rating Model..............................................................................................55
4.3.1 Earning Appraisal:...............................................................................................55
4.3.2 Asset Quality.........................................................................................................58
4.3.3 Growth...................................................................................................................60
4.3.4 Liquidity................................................................................................................62
4.3.5 Equity.....................................................................................................................64
4.3.6 Strategy..................................................................................................................67
4.4 Overall Ranking (as per Eagles):...............................................................................68
5 Findings Suggestion and Conclusion...................................................................................69
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1 Introduction
1.1 Indian Banking Sector: A Brief History

1.1.1 Pre-independence Era
Banking in India is an old concept emerging as early as the historic times and evolving
itself along with the socio-economic changes in the subcontinent. The pre-independence
period was largely characterized by the existence of private banks organized as joint
stock companies. Most banks were small and had private shareholding of the closely held
variety. They were largely localized and many of them failed. Modern banking (i.e. in the
form of joint-stock companies) may be said to have had its blossom in India as far back
as in 1786, with the establishment of the General Bank of India. The early 19th century
saw the establishment of the three presidency banks of Bengal, Bombay and Madras.
They were merged to form the Imperial Bank of India in 1921 after their successful
functioning for about a century as independent banks. The Imperial Bank was then taken
over by what is now widely popular as the State Bank of India, established under the
State Bank of India Act of 1955. The veteran Swadeshi movement in India witnessed the
birth of several indigenous banks.
The Reserve Bank of India was set up under the Reserve Bank of India Act in 1935 as the
apex body governing all banks. In the initial days of independence the banking sector
faced quite a lot of difficulties due to the partition of India and hence the successive
division of assets of RBI. The act of currency management and banking consolidation
was indeed challenging in this transitional era. The broad objectives undertaken by the
then operating monetary and banking policies was to
(a) Issue of currency notes

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(b) Public debt management and
(c) Maintaining exchange value of the Rupee.
1.1.2 Post-independence Era:

The early years of independence (1947 to 1967) posed several challenges with an
underdeveloped economy presenting the classic case of market failure in the rural sector,
where information asymmetry limited the foray of banks. In 1949, the Banking
Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to
regulate, control, and inspect the banks in India". Further, the non-availability of
adequate assets made it difficult for people to approach banks. With the transfer of
undertaking of Imperial Bank of India to State Bank of India (SBI) and its subsequent
massive expansion in the under-banked and unbanked centers spread institutional credit
into regions which were un-banked heretofore. Proactive measures like credit guarantee
and deposit insurance promoted the spread of credit and savings habits to the rural areas.
There were, however, problems of connected lending as many of the banks were under
the control of business houses. Also RBI during this time had a supplementary role in
economic policies while the Planning Commission exercised the actual control. The
planning period thereafter saw the emergence of heavy industries which required high
amount of credit provision to the government. In order to control the bulging inflationary
pressure RBI opted for regulated bank deposit and lending rates which initiated rationing
of bank credit. Moreover the Banking Regulation Act provided that no new bank or
branch of an existing bank could be opened without a license from the RBI, and no two
banks could have common directors.
Despite the provisions, control and regulations of RBI, banks in India except the SBI,
continued to be owned and operated by private persons. By the 1960s, the Indian banking
industry had established itself to be an important tool to facilitate the development of the
Indian economy. At the same time, it had emerged as a large employer, and a debate had
ensued about the nationalization of the banking industry. Also, the banking system
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although had made some progress regarding the deposit growth, its spread was mainly
urban. During the time, banks were run to quench their requirements rather than satisfy
commercial principles. This gradually eroded in the capital base of banks. The ratio of
paid-up capital and reserves to deposits declined by more than 75 per cent from
9.7 per cent in 1951 to 2.2 per cent in 1969. The rapid increase in deposits in relation to
their owned capital enabled the industrialist shareholders to enjoy immense leverage. It
was felt that if bank funds had to be channeled for rapid economic growth with social
justice, there was no alternative to nationalization of at least the major segment of the
banking system. Accordingly, the Government nationalized 14 banks with deposits of
over Rs.50crore by promulgating the Banking Companies (Acquisition and Transfer of
Undertakings) Ordinance, 1969.
The move thereafter was swift. The Government of India issued an ordinance ('Banking
Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969')) and
nationalized the 14 largest commercial banks in 1969. These banks contained 85 percent
of bank deposits in the country. The nationalization of banks was an attempt to make use
of the scarce resources of the banking system for the purpose of planned development.
The banks had limited lending in the rural sector owing to the unprofitable task of
maintaining a large number of small accounts. The problem of lopsided distribution of
banks and the lack of explicit articulation of the need to channel credit to certain priority
sectors was sought to be achieved first by social control on banks and then by the
nationalization of banks in 1969 and 1980. The Lead Bank Scheme provided the blue-
print of further bank branch expansion. The course of evolution of the banking sector in
India since 1969 has been dominated by the nationalization of banks. This period was
characterized by rapid branch expansion that helped to draw the channels of monetary
transmission far and wide across the country. The share of unorganized credit fell sharply
and the economy seemed to come out of the low level of equilibrium trap. However, the
stipulations that made this possible and helped spread institutional credit and nurture the
financial system, also led to distortions in the process. The administered interest rates and
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the burden of directed lending constrained the banking sector significantly. There was
very little operational flexibility for the commercial banks. Profitability occupied a back
seat. Banks also suffered from poor governance. The financial sector became the
‘Achilles heel’ of the economy (Rangarajan, 1998). Fortunately, for the Indian economy,
quick action was taken to address these issues. A second phase of nationalization
occurred during 1980 to some private banks which were found to be victim of poor
governance. As a result of it 6 more banks with demand and time liabilities more than
Rs.200crores were nationalized and with that all the nationalized banks together
constituted of 91% of the banking sector deposits.
One of the outcomes of the substantial expansionary plan expenditure during the 1970s
and the 1980s was that the Government’s budget expanded and the banking sector was
increasingly used for financing fiscal deficits. The fiscal deficit to GDP ratio increased
steadily from 3.1 per cent of
GDP in 1970-71 to 5.8 per cent in 1980-81 and further to 7.9 in 1990-91. In order to
counter the impact of deficit financing that fuelled excess money growth, the Reserve
Bank was required to raise the cash reserve ratio frequently and it subsequently increased
from 5 per cent in June 1973 to 15 percent by July 1989. There also occurred a steady
rise in the statutory liquidity ratio from 26% in 1970 to 38.5 in 1990. Thus, by 1991, 63.5
per cent resources of the banking sector were pre-empted in the form of SLR and CRR.
1.1.3 Post-Reform Era

The first wave of liberalization was felt in the end 70’s and early 80’s. Import
liberalization had set in along with the relaxation of quotas and ceilings. The branch
expansion of banks brought in with it several challenges regarding asset quality and
profitability. This was tried to be consolidated by restructuring of internal procedures,
credit management, staff productivity etc. Another added problem was the historical
nature of functioning of banks which did not allow them to undertake nonbanking
activities, as a result of which there was an increased amount of competition between
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banks and stock and bond markets, NBFCs and mutual fund schemes. The amendment of
Banking Regulation Act in 1984 paved the way for the banks to conduct merchant
banking activities with risk coverage from the RBI itself through subsidiaries. Further the
government tried to improve the health of the weak nationalized banks by raising their
capital base. Priority sector lending also took a front seat during this time in order to
bring credit to agricultural sector and strengthen it at the face of industry. The share of
rural deposits in total deposits increased from 3 per cent in 1969 to 16 percent in 1990.
The share of credit to the rural sector in total bank credit increased from 3.3 per cent in
1969 to 14.2 per cent in 1990. During the early 1990’s there was a serious balance of
payments problem in the economy. In that backdrop the Central government launched the
initial financial sector reforms as a part of the reforms engulfing trade, industry,
investment, and external sector. This facilitated the banking sector in this phase to evolve
to a significant extent. It was felt that unless the financial sector, with the banking system
in particular, was not raised to be vibrant and competitive, the successful realization of
the full potential of reforms in the real economy would remain unattended. A high-
powered Committee on the Financial System (CFS) was constituted thereof, led by the
Chairman Mr. M. Narsimham, by the Government of India in August 1991 to examine all
aspects relating to the structure, organization, functions and procedures of the financial
system. The Committee, which submitted its report in November 1991, made wide-
ranging recommendations, which formed the basis of financial sector reforms relating to
banks, development financial institutions (DFIs) and the capital market in the coming
years. The progress made by the banking sector in extending its geographical spread and
operations which consolidated financial intermediation and growth in the country was
acknowledged by the committee. However, simultaneously it pointed to the poor health
of the banking sector. It cautioned that the situation would turn worse and erode the real
value of and return on the savings entrusted to it and even have an adverse impact on
depositor’s and investor’s confidence unless the deterioration in the financial health of
the system was not treated quickly. Accordingly, to impart efficiency and dynamism to
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the financial sector, financial sector reforms were initiated as part of overall structural
reforms. The country’s outlook to reform in the banking and financial sector was ruled by
the five principles: (i) cautious and sequencing of reform measures; (ii) introduction of
norms that were mainly reinforcing; (iii) introduction of complementary reforms across
sectors (monetary, fiscal, external and financial sectors); (iv) development of financial
institutions; and (v) development and integration of financial markets. The evolution of
the banking sector in this phase could be further divided into two sub phases,
i.e., from 1991-92 to 1997-98 and 1997-98 onwards.
During the first phase, the prominent issues of concern were the fragile health, low
profitability and weak capital base of banks. Internationally accepted prudential norms
relating to income recognition, asset classification & provisioning and capital adequacy
were introduced in 1992 in order to improve the health of the banking sector. The banks
had to classify their assets based on their performances which provided the picture that
almost a quarter of the bank’s advances were captive in unproductive resources. To
achieve capital adequacy level Capital to Risk-weighted Asset Ratio was brought in. The
Public Sector Units were allowed to approach the capital markets directly to mobilize
equity funds from public. In effect with these norms and regulations, banks could shortly
bring down their NPA’s. Simultaneously, CRR and SLR were also cut down with a view
to improve upon bank’s profitability and raise the lendable resources. Banks were also
free to fix their own deposit and lending rates. Along came the rationalization and
deregulation of interest rates, on both deposit & lending sides. In order to bring about a
competitive environment RBI allowed for entry of new private & foreign banks in the
economy. CAMELS were introduced to inspect upon the banks operation and
performances. Justifiable Customer Services at fair prices were also started through
Banking Ombudsman. Priority sector operations were expanded by interest rate
deregulations and permitting alternative avenues of investment. NABARD catered to the
Rural Infrastructure Development Fund as & when the banks failed to do so. Measures
for ameliorating the problem in the agricultural credit were also initiated. The end of this
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phase was marked with a significant overcome in the financial performance, asset quality,
capital position and behavioral change in the banking system. However some concerns
continued to persist in certain section of the banks such as high NPA in PSUs compared
to international standards, failure to achieve prescribed capital adequacy ratio, continuity
of incurring losses, non-penetration of competition etc. Added to that the dwindling state
of debt recovery system led to risk aversion by banks as a result of application of
prudential norms & pressurizing banks to reduce NPAs. Moreover RRB’s still failed to
function satisfactorily. The East Asian Crisis of 1997 also invoked an air of panic to the
risks of weak banking on the real economy. Thus, further in view of upgrading the
banking sector the Narsimham Committee II came into rescue with submission of its
reports in 1998. It stated the following improvisations: the minimum capital to risk-
weighted assets was marginally raised, asset-liability management due to mismatch
between the two, along with better risk management norms were initiated.
Implementation of tighter income recognition, asset classification & provisioning norms
were ensured. Thereafter, following the Basel Committee amendments, the banks were
required to maintain capital charge for market risks.
The establishment of Credit Information Bureau (India) Ltd (CIBIL) with a point to
strengthen the legal mechanism and facilitate several credit information bureaus to
collect, process and share credit information to various borrowers of banks was initiated.
Credit grew rapidly also due to sharp increase in bank credit to household sector. The
repo rate was increased to manage credit to retail sector and also tackle inflationary
pressures. Competition between the banks intensified as was reflected by mergers &
acquisitions. Also many banks introduced sub-BPLR lending and the spread between
minimum and maximum lending rate increased considerably. FDI in banking sector was
brought under the automatic route; the private sector benefitting a raise in FDI limit from
49 to 74% under this. Diversification in bank operations was seen with introduction of
services in primary issues and activities concerning advisory, custodial & depository and
insurance business leading to rise in non-interest income. Ownership of private banks
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was well diversified to bring about quality in management performances. RBI, on
recognizing the critical role posed by SSI on the economy, came out with measures to
increase flow of credit to them by broadening the scope for indirect finance, making
investments in securitized assets, adopting of cluster-based approach for financing them,
publicizing working models of NGOs etc. SIDBI also assisted wherever required. A
package of relief measures for farmers was introduced in 2004 by RBI & NABARD.
Banks were asked to take aid of NGOs/SHGs, MFIs to reach the doorstep of clients and
compete with informal sector which were easily accessible. The focus thus shifted from
class banking to mass banking with the objective of financial inclusion which ushered in
facilities like ‘no-frills account’. It was planned to revive the state of Urban Cooperative
banks either through mergers or liquidation. Customer services along with financial
literacy were upgraded through credit counseling. Technological soundness was observed
in branch computerization and setting up of ATMs. RTGs and NEFT were implemented
to bring down risks of e-payments and transfers.
1.1.4 Performance of Commercial Banks during Post- Reforms Period

Banking sector plays a key role in development of Indian economy. The banking system
in India during the pre-reform period was highly regulated. The system was characterized
by a complex structure of administered interest rates, low organizational efficiency, high
level of statutory preemptions, directed lending, low efficiency in fund utilization and
lack of competition. All these challenges have led the Indian financial system to
undergone major changes. Thus, financial sector reforms in India have been initiated in
1992 as an integral element of the ongoing process of economic and structural reform.
The Important steps were taken in the processes of reforms; reducing of government’s
stake in public sector banks, permitting private and foreign banks into banking business,
interest rate deregulation and liberalization of statutory preemptions. All these reform
initiatives were expected to enhance the profitability and productivity of the banking
sector in India. Therefore, the present study attempted to assess the impact of financial
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sector reforms on the performance of commercial banks India during post-reforms period.
Despite there has been vast literature on the performance of commercial banks in India
during post-reform era, the majority of the studies confined only either public sector
banks or private sector banks or all commercial banks not on bank group wise. Even,
some studies were conducted on bank group wise, those studies examine only the
performance of banks either in terms of profitability or productivity or in terms of
technological development. Conversely, the present study attempted to look at the
performance of various bank groups in terms of profitability, productivity, asset quality
and technological development during the post reforms period.
1.2 Major 8 Banks of India

1.2.1 Axis Bank Ltd.
Axis Bank Limited is an Indian private sector bank headquartered in

Mumbai, Maharashtra. It sells financial services to large and mid-size companies, SMEs
and retail businesses. As of 30 June 2016, 30.81% shares are owned by the promoters and
the promoter group (United India Insurance Company Limited, Oriental Insurance
Company Limited, National Insurance Company Limited, New India Assurance
Company Ltd, GIC, LIC and UTI). The remaining 69.19% shares are owned by mutual
funds, FIIs, banks, insurance companies, corporate bodies and individual investors.
History
The bank was founded in December 1993 as UTI Bank, opening its registered office
in Ahmedabad and a corporate office in Mumbai. The bank was promoted jointly by the
Administrator of the Unit Trust of India (UTI), Life Insurance Corporation of
India (LIC), General Insurance Corporation, National Insurance Company, The New
India Assurance Company, The Oriental Insurance Corporation and United India
15
Insurance Company. The first branch was inaugurated on 2 April 1994
in Ahmedabad by Manmohan Singh, then finance minister of India.
In 2001 UTI Bank agreed to merge with Global Trust Bank, but the Reserve Bank of
India (RBI) withheld approval and the merger did not take place. In 2004, the RBI put
Global Trust under moratorium and supervised its merger with Oriental Bank of
Commerce. The following year, UTI bank was listed on the London Stock Exchange. In
the year 2006, UTI Bank opened its first overseas branch in Singapore. The same year it
opened an office in Shanghai, China. In 2007, it opened a branch in the Dubai
International Financial Centre and branches in Hong Kong.
On 30 July 2007, UTI Bank changed its name to Axis Bank. In 2009, Shikha Sharma was
appointed as the MD and CEO of Axis Bank. In 2013, Axis Bank's subsidiary, Axis Bank
UK commenced banking operations. On 1 January 2019, Amitabh Chaudhry took over as
MD and CEO.
Services
Retail banking:
The bank offers lending services to individuals and small businesses, along with liability
products, card services, Internet banking, automated teller machines (ATM) services,
depository, financial advisory services, and Non-resident Indian (NRI) services. Axis
bank is a participant in RBI's NEFT enabled participating banks list.
Corporate banking:
Transaction banking: Axis Bank provides products and services related to transaction
banking to customers in areas of current accounts, cash management services, capital
market services, trade, foreign exchange and derivatives, cross-border trade and
correspondent banking services and tax collections on behalf of the Government and
various State Governments in India.
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Investment banking and trustee services: The bank provides investment banking and
trusteeship services through its owned subsidiaries. Axis Capital Limited provides
investment banking services relating to equity capital markets, institutional stock
brokering besides M&A advisory. Axis Trustee Services Limited is engaged in
trusteeship activities, acting as a debenture trustee and as a trustee to
various securitization trusts.
International banking:
The bank offers corporate banking, trade finance, treasury and risk management through
the branches at Singapore, Hong Kong, DIFC, Shanghai and Colombo, and also retail
liability products from its branches at Hong Kong and Colombo. The representative
office at Dhaka was inaugurated during the current financial year.
Holder's Name % Share Holding

Promoters 13.59%
Foreign Institutions 49.77%
Banks Mutual Funds 17.51%
Others 6.48%
General Public 4.75%
Financial Institutions 5.45%
GDR 2.45%
1.2.2 Bank of Baroda

Bank of Baroda is an Indian nation owned banking and financial services corporation
head quartered in Vadodara. The bank of Baroda becomes based with the aid of the
Maharaja of Baroda, H.H. Sir
Sayajirav Gaekwad on 20th July, 1908 in the princely nation of Baroda with a paid up
capital of
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Rs. 10 lakhs. For BOB, it's been long and eventful adventure of almost a century
throughout 25 international locations. Bank of Baroda is one of the large banks of India
along with SBI, PNB and ICICI Bank.
After establishment in 1908, after two years BOB hooked up its first branch in
Ahmadabad. The bank grew regionally till World War II. Then, in 1953 it crossed the
Indian Ocean to serve the communities of Indians in Kenya and Indians in Uganda by
using establishing a branch each in Mombasa and Kampala. In 1961-62, the new Citizen
bank Ltd. Amalgamated with the Bank. In 1963, BOB acquired Surat Banking agency in
Surat, Gujarat. In 1969, the Indian government
Nationalized 14 pinnacle banks together with BOB. In 1972, BOB acquired Bank of
India’s operations in Uganda. Two years later, BOB opened a branch each in Dubai and
Abu Dhabi. In 1975, it has obtained the majority shareholding and control &
management of Bareilly corporation bank (east. in 1928) and Nainital bank (east. In
1954) both in Uttar Pradesh. Considering that then, Nainital Bank has accelerated to
Uttarakhand state.
In 1976, BOB opened the branch in Oman and other in Brussels and after two years, it
has opened a branch in New York and some other within the Seychelles. In 1988, BOB
obtained Traders bank, which had a network of 34 Branches in Delhi. In 1996, BOB
entered the capital market in December with an initial public offering.
International Presence:
In its international expansion, the bank of Baroda observed the Indian Diaspora, mainly
that of Guajarati’s. The bank has 101 branches or offices in 24 countries which include
61 branches or offices of the bank, 38 branches s of its 8 subsidiaries and 1 consultant
workplace in Thailand. The bank of Baroda has a joint venture in Zambia with having 16
branches.
Bank of Baroda Subsidiaries
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Domestic:
 BOB Cards Ltd.
 BOB capital Markets Ltd.
 Nainital Bank Ltd.
International:
 Bank of Baroda (Botswana) Ltd.
 Bank of Baroda (Kenya) Ltd.
 Bank of Baroda (Uganda) Ltd.
 Bank of Baroda (Guyana) Ltd.
 Bank of Baroda (New Zealand) Ltd.
 Bank of Baroda (Tanzania) Ltd.
 Bank of Baroda (Trinidad & Tobago) Ltd.
 Bank of Baroda (Ghana) Ltd.
 Representative office : Bank of Baroda (Thailand)

Promoters 63.97%
Others 2.52%
1.2.3 Central Bank of India
Central Bank of India, an Indian government-owned bank, is one of the oldest and largest
commercial banks in India. It is based in Mumbai which is the financial capital of India
and capital city of state of Maharashtra.
19
It is one of twelve public sector banks in India to get recapitalised in 2009. Despite its
name it is not the central bank of India. It is a public bank. In a merging initiative of the
NDA government, Central Bank of India is kept as a separate entity owing to its pan-
India presence.
Central Bank of India has approached the Reserve Bank of India (RBI) for permission to
open representative offices in five more locations – Singapore, Dubai, Doha and London.
As on 31 March 2020, the bank has a network of 4,651 branches, 3,642 ATMs, ten
satellite offices and one extension counter. It has a pan-India presence covering all 28
states, Seven out of eight union territories and 574 district headquarters out of all districts
in the country.
History:
Established in 1911, Central Bank of India was the first Indian commercial bank which
was wholly owned and managed by Indians. The establishment of the Bank was the
ultimate realisation of the dream of Sir Sorabji Pochkhanawala, founder of the Bank. Sir
Pherozesha Mehta was the first Chairman of a truly 'Swadeshi Bank'. In fact, such was
the extent of pride felt by Sir Sorabji Pochkhanawala that he proclaimed Central Bank of
India as the 'property of the nation and the country's asset'. He also added that 'Central
Bank of India lives on people's faith and regards itself as the people's own bank'.
During the past 106 years of history the Bank has weathered many storms and faced
many challenges. The Bank could successfully transform every threat into business
opportunity and excelled over its peers in the Banking industry.
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Promoters 89.78%
Others 0.56%
1.2.4 HDFC
HDFC Bank Limited is an Indian Development finance institution headquartered in
Mumbai, Maharashtra. It has a base of 104,154 permanent employees as of 30 June 2019.
[10]
HDFC Bank is India’s largest private sector bank by assets. [11] It is the largest bank
in India by market capitalisation as of March 2020. A subsidiary of the Housing
Development Finance Corporation, HDFC Bank was incorporated in 1994, with its
registered office in Mumbai, Maharashtra, India. Its first corporate office and a full-
service branch at Sandoz House, Worli were inaugurated by the Union Finance
Minister, Manmohan Singh.
As of 30 June 2019, the Bank's distribution network was at 5,500 branches across 2,764
cities. The bank also installed 430,000 POS terminals and issued 23,570,000 debit cards
and 12 million credit cards in FY 2017.
Services:
Retail Banking: HDFC Bank offers a diverse range of financial products and banking
services to customers through a growing branch and ATM network and digital channels
such as Net banking, Phone banking and Mobile Banking.
Wholesale Banking: HDFC Bank offers a wide gamut of commercial and transactional
banking services to businesses and organizations of all sizes. Their services include
working capital finance, trade services, transactional services and cash management.
21
Treasury: Under treasury services, we help businesses generate better returns on their
funds and manage financial risk. We focus on three main product areas: foreign exchange
and derivatives, local currency money market and debt securities, and equities.
Acquisition & Amalgamation:

 In the year of 2000 Times Bank ltd., and another new Private sector bank
promoted by – Times Group was merged with HDFC Bank Ltd in February 26,
2000. It has created a sensation in the generation of Private sector banks.
 In the year of 2008 HDFC bank has amalgamated centurion Bank of Punjab and
was approved by RBI.
The amalgamation enhanced a performance of HDFC Bank in aspect of branch network,
geographic reach, customer base and a bigger pool of skilled man power.
Subsidiaries:
HDFC bank has to subsidiaries:
 HDB Financial services Ltd. (HDBFS).
 HDFC Securities Ltd (HSL)

Promoters 21.16%
Others 2.19%
22
1.2.5 ICICI Bank
ICICI Bank Limited is an Indian Development finance institution with its registered
office in Vadodara, Gujarat and corporate office in Mumbai, Maharashtra. It offers a
wide range of banking products and financial services for corporate and retail
customers through a variety of delivery channels and specialised subsidiaries in the areas
of investment banking, life, non-life insurance, venture capital and asset management.
The bank has a network of 5,275 branches and 15,589 ATMs across India and has a
presence in 17 countries.
ICICI Bank is one of the Big Four banks of India. The bank has subsidiaries in the United
Kingdom and Canada; branches in United States, Singapore, Bahrain, Hong Kong, Qatar,
Oman, Dubai International Finance Centre, China and South Africa; as well as
representative offices in United Arab Emirates, Bangladesh, Malaysia and Indonesia. The
company's UK subsidiary has also established branches in Belgium and Germany
History:
ICICI Bank was established by the Industrial Credit and Investment Corporation of India
(ICICI), an Indian financial institution, as a wholly owned subsidiary in 1994
in Vadodara. The parent company was formed in 1955 as a joint-venture of the World
Bank, India's public-sector banks and public-sector insurance companies to provide
project financing to Indian industry. The bank was founded as the Industrial Credit and
Investment Corporation of India Bank, before it changed its name to ICICI Bank. The
parent company was later merged with the bank.
ICICI Bank launched Internet Banking operations in 1998. ICICI, ICICI Bank, and ICICI
subsidiaries ICICI Personal Financial Services Limited and ICICI Capital Services
Limited merged in a reverse merger in 2002.
In 2008, following the 2008 financial crisis, customers rushed to ICICI ATMs and
branches in some locations due to rumours of an adverse financial position of ICICI
23
Bank. The Reserve Bank of India issued a clarification on the financial strength of ICICI
Bank to dispel the rumours.
Services:
ICICI Bank has been the second largest private bank in retail banking. The uses of latest
technology has always kept the bank at par with its competitors. With services like
internet banking, mobile banking, pocket by ICICI and ATM the customers enjoys wide
variety by the bank.

Central Govt 0.34%
Others 1.86%
GDR 20.06%
1.2.6 IndusInd bank
IndusInd Bank Limited is a new-generation Indian bank headquartered in Pune. The bank
offers commercial, transactional and electronic banking products and services. IndusInd
Bank was inaugurated in April 1994 by then Union Finance Minister Manmohan
Singh. IndusInd Bank is the first among the new-generation private banks in India.
The bank started its operations with ₹100 crores (10 billion) in capital, of which ₹60
crores were raised by Indian residents and ₹40 crores were raised by Non-Resident
Indians (NRI). The bank specializes in retail banking services and is also working on
expanding its network of branches all across the country. According to the bank, its name
is derived from the Indus Valley Civilisation.
As on 31 December 2018, IndusInd Bank had 1,558 branches, and 2453 ATMs spread
across different geographical locations of the country. It also has representative offices in
24
London, Dubai and Abu Dhabi. Mumbai has the largest number of bank branches
followed by New Delhi and Chennai. The bank has proposed to double its branch count
to 1200 by March 2019.
History:
Established in 1994 by Srichand P Hinduja, the name ‘IndusInd’ Bank was inspired by
the Indus Valley Civilisation - one of the greatest cultural example of a combination of
innovation with sound business and trade practices. Over the years, we have grown
ceaselessly and dynamically driven by a zeal to offer our customers banking services at
par with the highest quality standards in the industry.
Banking Services:
 Branch banking.
 Consumer finance.
 Corporate banking and finance.
 Commercial and transaction banking.
 Cash Management Services (CMS).
 Trade Services Utility (TSU)
 Depository operations.
 Treasury operations.
 Wealth management.
25
Others 5.67%
Foreign Promoter 15.20%
GDR 8.21%
1.2.7 PNB
Punjab National Bank, abbreviated as PNB, is an Indian government owned bank

headquartered in New Delhi, India. The bank was founded in 1894 and is the second
largest government owned bank in India, both in terms of business and its network. The
bank has over 180 million customers, 10,910 branches and 13,000+ ATMs post-merger
with United Bank of India and Oriental Bank of Commerce, effective from 1 April 2020.
PNB has a banking subsidiary in the UK (PNB International Bank, with seven branches
in the UK), as well as branches in Hong Kong, Kowloon, Dubai, and Kabul. It has
representative offices in Almaty (Kazakhstan), Dubai (United Arab
Emirates), Shanghai (China), Oslo (Norway), and Sydney (Australia). In Bhutan it owns
51% of Druk PNB Bank, which has five branches. In Nepal PNB owns 20% of Everest
Bank Limited, which has 50 branches. Lastly, PNB owns 41.64% of JSC (SB) PNB Bank
in Kazakhstan, which has four branches.
History:
Punjab National Bank is a PSU working under Central Government of India regulated
by Reserve Bank of India Act, 1934 and Banking Regulation Act, 1949. Punjab National
Bank was registered on 19 May 1894 under the Indian Companies Act, with its office
in Anarkali Bazaar, Lahore, in present-day Pakistan. The founding board was drawn from
26
different parts of India professing different faiths and of varying back-ground with, the
common objective of creating a truly national bank that would further the economic
interest of the country.[1] PNB's founders included several leaders of
the Swadeshi movement such as Dyal Singh Majithia and Lala Harkishen Lal, Lala
Lalchand, Kali Prosanna Roy, E. C. Jessawala, Prabhu Dayal, Bakshi Jaishi Ram, and
Lala Dholan Dass.[9][10] Lala Lajpat Rai was actively associated with the management of
the Bank in its early years. The board first met on 23 May 1894.[1] The bank opened for
business on 12 April 1895 in Lahore.
PNB is the first Indian bank to have been started solely with Indian capital that survives
to the present – the earlier Oudh Commercial Bank was established in 1881, but failed in
1958.
Mahatma Gandhi, Jawahar Lal Nehru, Lal Bahadur Shastri, Indira Gandhi and
the Jalianwala Bagh Committee have held PNB accounts.
Schemes / Products / Services:
Punjab National Bank, is extensively catering to banking needs of Non-resident Indians,

Importers & Exporters particularly relating to foreign exchange business including
Imports & Exports of Goods & Services as also Remittances etc.
PNB offers various schemes / products /services relating to international banking. The
broad details thereof are as under:
 Indo Nepal Remittance Scheme (INREMIT Scheme)
 Foreign Currency Non-resident Deposit A/c Scheme (FD)
 Non-resident External Deposit A/c Scheme (SB/CA/FD)
 Non-resident Ordinary Deposit A/c Scheme (SB/CA/FD/RD)
 Foreign Inward Remittances – Rupee Drawing Arrangements / Speed
Remittances with Exchange Houses
 Money Transfer Schemes
27
 PNB-NRI REMIT Scheme
 Exchange of Foreign Currency Travellers Cheques/Notes
 World Travel Card
 Buyers` / Suppliers` Credit against Imports into India
 Letter of Guarantee (issued on behalf of foreign bank)
 Precious Metal Business (on consignment basis)
 Gold (Metal) Loan Scheme for Domestic Jewellery Manufacturers.
 ECGC – Bank assurance - Selling of policies to exporters

Promoters 76.87%
Central Govt 0.03%
Others 1.76%
1.2.8 SBI
State Bank of India (SBI) is an Indian multinational, public sector banking and financial
services statutory body headquartered in Mumbai, Maharashtra. SBI is the 43rd largest
bank in the world and ranked 221st in the Fortune Global 500 list of the world's biggest
corporations of 2020, being the only Indian bank on the list. It is a public sector bank and
the largest bank in India with a 23% market share by assets and a 25% share of the total
loan and deposits market.
The bank descends from the Bank of Calcutta, founded in 1806 via the Imperial Bank of
India, making it the oldest commercial bank in the Indian Subcontinent. The Bank of
Madras merged into the other two presidency banks in British India, the Bank of
Calcutta and the Bank of Bombay, to form the Imperial Bank of India, which in turn
became the State Bank of India in 1955. The Government of India took control of the
28
Imperial Bank of India in 1955, with Reserve Bank of India (India's central bank) taking
a 60% stake, renaming it State Bank of India.
History:
The roots of State Bank of India lie in the first decade of the 19th century when the Bank
of Calcutta later renamed the Bank of Bengal, was established on 2 June 1806. The Bank
of Bengal was one of three Presidency banks, the other two being the Bank of
Bombay (incorporated on 15 April 1840) and the Bank of Madras (incorporated on 1 July
1843). All three Presidency banks were incorporated as joint stock companies and were
the result of royal charters. These three banks received the exclusive right to issue paper
currency till 1861 when, with the Paper Currency Act, the right was taken over by the
Government of India. The Presidency banks amalgamated on 27 January 1921, and the
re-organised banking entity took as its name Imperial Bank of India. The Imperial Bank
of India remained a joint-stock company but without Government participation.
Pursuant to the provisions of the State Bank of India Act of 1955, the Reserve Bank of
India, which is India's central bank, acquired a controlling interest in the Imperial Bank
of India. On 1 July 1955, the Imperial Bank of India became the State Bank of India. In
2008, the Government of India acquired the Reserve Bank of India's stake in SBI so as to
remove any conflict of interest because the RBI is the country's banking regulatory
authority.
In 1959, the government passed the State Bank of India (Subsidiary Banks) Act. This
made eight banks that had belonged to princely states into subsidiaries of SBI. This was
at the time of the First Five Year Plan, which prioritised the development of rural India.
The government integrated these banks into the State Bank of India system to expand its
rural outreach. In 1963 SBI merged State Bank of Jaipur (est. 1943) and State Bank of
Bikaner (est.1944).
SBI has acquired local banks in rescues. The first was the Bank of Bihar (est. 1911),
which SBI acquired in 1969, together with its 28 branches. The next year SBI acquired
29
National Bank of Lahore (est. 1942), which had 24 branches. Five years later, in 1975,
SBI acquired Krishnaram Baldeo Bank, which had been established in 1916 in Gwalior
State, under the patronage of Maharaja Madho Rao Scindia. The bank had been
the Dukan Pichadi, a small moneylender, owned by the Maharaja. The new bank's first
manager was Jall N. Broacha, a Parsi. In 1985, SBI acquired the Bank of Cochin
in Kerala, which had 120 branches. SBI was the acquirer as its affiliate, the State Bank of
Travancore, already had an extensive network in Kerala.
There was, even before it actually happened, a proposal to merge all the associate banks
into SBI to create a single very large bank and streamline operations.
The first step towards unification occurred on 13 August 2008 when State Bank of
Saurashtra merged with SBI, reducing the number of associate state banks from seven to
six. On 19 June 2009, the SBI board approved the absorption of State Bank of Indore, in
which SBI held 98.3%. (Individuals who held the shares prior to its takeover by the
government held the balance of 1.7%).
The acquisition of State Bank of Indore added 470 branches to SBI's existing network of
branches. Also, following the acquisition, SBI's total assets approached ₹10 trillion. The
total assets of SBI and the State Bank of Indore were ₹9,981,190 million as of March
2009. The process of merging of State Bank of Indore was completed by April 2010, and
the SBI Indore branches started functioning as SBI branches on 26 August 2010.
On 7 October 2013, Arundhati Bhattacharya became the first woman to be appointed

Chairperson of the bank. Mrs. Bhattacharya received an extension of two years of service
to merge into SBI the five remaining associate banks.
State Bank of India Services:
30
 State Bank of India Services are most varied and innovative amongst all its
contemporaries. State Bank of India Services includes a host of products and
services to suit all types of consumers.
 Banking Subsidiaries- State Bank of Bikaner and Jaipur (SBBJ), State Bank of
Hyderabad (SBH), State Bank of Indore (SBI), State Bank of Mysore (SBM),
State Bank of Patiala (SBP), State Bank of Saurashtra (SBS) and State Bank of
Travancore (SBT).
 Foreign Subsidiaries - State bank of India International (Mauritius) Ltd, State
Bank of India (California), State Bank of India (Canada) and INMB Bank Ltd,
Lagos.
 Non- banking Subsidiaries - SBI Capital Markets Ltd (SBICAP), SBI Funds
Management Pvt Ltd (SBI FUNDS), SBI DFHI Ltd (SBI DFHI), SBI Factors and
Commercial Services Pvt Ltd (SBI FACTORS) and SBI Cards & Payments
Services Pvt. Ltd. (SBICPSL)
 Joint ventures - SBI Life Insurance Company Ltd (SBI LIFE).
 Products & Services
 Personal Banking
 NRI Services
 Agriculture
 International
 Corporate
 SME
 Domestic Treasury
 SBI Retail Banking
31
The following services are provided under Retail Banking:-
 Term Deposits
 Recurring Deposits
 Housing Loan
 Educational Loan
 Personal Loan
 For Pensioners
 Against Mortgage of Property
 Against Shares & Debentures
 Plus Scheme
 Medi-Plus Scheme
 Rates of Interest.

Promoters 56.92%
Central Govt 0.20%
Others 0.98%
GDR 1.25%
32
2 Research Methodology
2.1 Objective of the study
General Objective:
The general objective of the study is to analyze the performance of commercial banks in
India and to rank the respective commercial banks based on their performances.
Specific Objectives:
 To review the present status of Indian Banks.
 To examine the Financial Performance of selected Banks from the view point of
CAMELS and EAGLES Models.
 To rank the banks based on CAMELS and EAGLES models regarding financial
Performance.
 To make suggestions for the better performance of selected banks based on
CAMELS and EAGLES Models.
2.2 Significance of the study
Banking plays a significant role in an economy. Public and Private sector Banks are
working together but with heavy competition with each other. Public sector Banks are
also using the core banking solution and provide other technology enabled services to
match with their counterpart Private sector banks. Once again RBI is in the process to
issue new banking licenses to new entitle in the banking sector. So, competition is going
to intensify in near future.
So, the present study is an attempt to evaluate performance of Indian Banking sector.
This study gives an idea about ups and downs of financial performance of selected public
and private sector banks. There, financial performance gives a path to other banking
institutions also. In nut shell, this study throws a light on financial environment of public
and private sector Banks.
33
2.3 Scope of the study
The study is going to use the data’s of 8 commercial banks of India for the years 2016-
2020 (5 years) however, results can be generalized to cover all commercial banks.
2.4 Limitation of the study
No study can be free from Limitations. The Limitations of the Present study are as under:
 The study is based on secondary data. The data is collected from annual
reports, Journals, Magazines and websites. So, Limitations of secondary data
remain with it and also apply to this study.
 In the present study only accounting and statistical tools are used i.e., Ratios
etc. it has its own limitations that also apply to this research work.
 Only few ratios taken into consideration for the analysis of Camels and Eagles
model because of time constraint.
 The present study has covered four public and four Private sector banks. So
any generalization for universal application is very difficult and cannot be
applied, because results of this study are confined and limited to the selected
banks.
2.5 Methodology
2.5.1 Data Collection
Main data for our project are the annual financial reports of each concerned bank
included in our studies. We have also used four main financial statements for ratio
analysis of selected commercial banks such as balance sheets, an income statement, cash
flow statement, statement of shareholder’s equity. In simple terms, key performance
indicators that showed the efficiency of the selected banks were used.
34
2.5.2 Sample Size
The sample size consists of 8 commercial Banks of India listed on stock exchange. The
data used for analysis of bank is for period of 5 years (2016-2020).
2.5.3 Data Analysis

We used the Camel and Eagle Model rating for performance evaluation of selected
commercial banks. In this work by using the data from financial report such as balance
sheet, income statement and cash flow statement of the respected commercial banks, and
using ratio analysis method we investigated the performance of commercial banks in
India and ranked them.
2.5.4 Techniques and Tools used

2.5.4.1 Ratio Analysis
Ratio analysis involves the methods of calculating and interpreting financial ratios to
assess the firm’s performance and status. It is a widely used tool of financial analysis. It
can be used to compare the risk and return relationships of firms of different sizes. Ratio
analysis is defined as the systematic use of ratio to interpret the financial statements so
that the strengths and weaknesses of a firm as well as its historical performance and
current financial condition can be determined.
Ratio analysis studies levels and changes of relative measurements of financial
performance.
This method is the most commonly used in the world practices of financial analysis
because of its relative simplicity and availability of data sources. When using the ratio
analysis one can tell how profitable a business is: to show if it has enough capital to meet
its obligations and even suggest whether its shareholders satisfied by an increasing value
of the company or not.
35
Ratio analysis can also help to confirm whether a company is doing better this year than
it was last year; and it can tell how a firm is performing comparing with similar firms in
industry.
2.5.4.2 Camels Rating Model:

Given the utmost importance of the banking sector to the economy it would prove useful
to rate and compare some of India’s largest commercial banks. This study seeks to
understand and compare some of India’s largest commercial sector banks via the well-
known CAMELS rating system. The CAMELS rating system is an internationally
recognized rating system that regulatory authorities use in order to rate and rank financial
institutions according to five factors represented by the acronym "CAMELS". These are
Capital Adequacy, Asset Quality, Management, Earnings, Liquidity and Sensitivity to
Market Risk (CAMELS). Each financial institution is assigned a score based on these
measures. An overall ranking based on CAMELS parameters is developed. However the
CAMELS model when implemented as it may not provide a true picture of the bank’s
performance. Hence using performance measures like the Compound Annual Growth
Rate (CAGR) and mean in conjunction with the CAMELS rating parameters will yield
more representative results. This can help us compare different banks on the basis of their
performances.
In our study we focus on the 4 public sector and 4 private sector banks by using different
ratios and attempt to arrive at a ranking methodology for these banks based on the
CAMELS approach. We simply don’t rank the parameters as they are but rank the banks
based on the five year CAGR and mean in some cases of each of the CAMELS
parameters.
36
2.5.4.3 Eagles Rating Model
The EAGLES is able to measure and compare banks performance in a more determinate,
objective and consistent manner. The name is derived from the key success factors
confronting banks today, i.e. Earning ability, Asset quality, Growth, Liquidity, Equity
and Strategy. This approach has been pioneered by the writer and has gained creditability
among the banking community and fund management industry in Asia, for competitor
analysis and investment planning respectively. It also predicted the Asian financial crisis
in the 1980s when the writer was “banned” from data collection in many countries.
EAGLES name has been adopted from the key success factors i.e. Earning Ability, Asset
Quality, Growth, Liquidity, Equity and strategy. EAGLES are able to measure and
compare banks performance in a more determinate, objective and consistent manner.
Over time these numerical measures act as early warning signs. Thus, EAGLES Model
plays a very significant role in this regard as it covers both financial and non-financial
parameters on which the regulators judge the performance of any bank.
3 Review of Literature
A healthy and vibrant economy requires a financial system that moves funds from people
who save to people who have productive investment opportunities. The financial system
is complex in both structure and function throughout the world. It includes many different
types of institutions’: banks, insurance companies, mutual funds, stock and bond markets,
etc.
According to Spong (2000), efficiency and competition are closely linked. In a
competitive banking system, banks must operate efficiently and utilize their resources
wisely if they are to keep their customers and remain in business. Competition has
implications for efficiency, innovation, pricing, availability of choice, consumer welfare,
and the allocation of resources in the economy.
According to literatures, bank performance studies have been started in the late 1980s
and/or early 1990s. These studies revolve on different theories. For Instance, the
37
signaling theory, which elaborates the relationship between capital and profitability,
suggests that higher capital is a positive signal to the market of the value of bank. By the
same token, a lower leverage indicates that banks perform better than their competitors
who can’t raise their equity without further deteriorating the profitability. The importance
of bank profitability can be appraised at the micro and macro level of the economy. At
the micro level, profit is the essential prerequisite of a competitive banking institutions
and the cheapest source of funds. It is not merely a result, but also a necessity for
successful banking in a period of growing competition on financial markets. Hence, the
basic aim of every bank management is to maximize profit, as an essential requirement
for conducting business. Various literatures written by academicians also assert that
profitability is the bottom line or ultimate performance result showing the net effects of
bank policies and activities in a financial year. As a matter of fact, numerous factors such
as inflation, accounting policy, high level of competition, etc., may have an influence on
a bank’s profitability. In due course, wide varieties of ratios are discussed and different
measures of profitability of commercial banks have been suggested.
(Baral, 2005) made a brief analysis that CAMELS appraisement belief has become a
concise and basal apparatus for examiners and regulators. This appraisement archetype
ensures a bank’s healthy conditions by reviewing altered aspects of a bank on the basis of
different sources of information such as financial statement, allotment sources,
macroeconomic data, budget and cash flow. According to CAMELS rating system, only
three banks are in the category of very strong banks and rest are either average or worst.
Camel rating is used to rank the bank based on their performance.
Using CAGR and mean we provide credibility to camel rating. By analyzing the financial
statements we can rank the bank. Camel rating is popular in India and is used by RBI for
rating different banks.
Dr. John Vong founder of the EAGLES Banking Benchmark, his views have been
published by Asian banking Journals, discussed publicly on television, and presented in
the U.S. and Europe. EAGLES name has been adopted from the key success factors i.e.
38
Earning Ability, Asset Quality, Growth, Liquidity, Equity and strategy. EAGLES are able
to measure and compare banks performance in a more determinate, objective and
consistent manner. The model analyses key ratios and is also considered as emerging
model besides Camels rating.
3.1 International Studies:
(Baral, 2005) made a brief analysis that CAMEL appraisement belief has become a
concise and basal apparatus for examiners and regulators. This appraisement archetype
ensures a bank’s healthy conditions by reviewing altered aspects of a bank on the basis of
different sources of information such as financial statement, allotment sources,
macroeconomic data, budget and cash flow.
(Alphonsius, 2009)), in his paper CAMEL based derived w-score function for banks
performance evaluation: an urgent necessity’ has made an endeavor to infer a basic
CAMEL – based capacity that can be utilized by bank controllers and administrations to
visualize, monitor, determine and proper emerging issues at short motive on daily,
weekly, monthly or annual basis before e they become out of bonds or intolerable. The
bank regulators and those in domain area unit implored to check the efficaciousness
(CLEAM) to derive function and certify its application with in the banking system.
3.2 Indian Studies:
(Nihir & Das, 2009) In their paper entitled A CAMEL analysis of the Indian Banking
Industry made a comparison between public sector banks with private/foreign banks. The
data has been extracted from the annual reports of respective banks for the five years.
Over all CAMEL rating the study found that private/ foreign banks are most efficient
than public sector banks but in terms of management quality and earnings quality needed
to be concentrate more.
39
(R.Jagdish & Raiyani, 2010) The purpose of this paper is to examine the financial
performance of pre and post-merger banks using CAMEL model so data has been
interpreted with the help of t-test. The sample of BOB, PNB, OBC, HDFC, ICICI and
CBOP has been taken for the analysis. With overall performance BOB is developed well
inspects of profitability, asset quality, liquidity and solvency. PNB is all right in respect
of spread ratio, asset quality, discharging of obligations, profitability and management
efficiency. OBC has developed after the merger through its liquidity, solvency,
profitability, asset quality and management quality. At last we can make a conclusion that
private sector banks are ruled over public sector banks in profitability and liquidity
whereas with capital Adequacy and NPA’s the result has been changed. So it has been
observed that private sector merged banks are performing well as compared to public
sector merged banks.
4 Data Analysis
The analysis is divided into two parts:
 Camels Rating Model
 Eagles Rating Model
4.1 CAMELS Rating Model
Capital adequacy is a measure of how adequately capitalised a bank is in its ability to

absorb any losses and meeting customer obligations. Two measures of capital adequacy
considered in this study are: (i) Capital Adequacy Ratio; and (ii) Debt to Equity Ratio.
Asset quality is a measure of the bank’s financial health. Improving asset quality is often
marked by strong financial performance. Two measures of asset quality considered in this
study are: (i) % Net Non-Performing Assets to Total Advances; and (ii) % Total
Investment to Total Assets. Management efficiency measures how capable top
management is in managing its operations and getting the most out of its work force. Two
measures of asset quality considered in this study are: (i) Profit per employee; and (ii)
40
Business per employee. Earnings quality looks at how profitable the bank is and its
ability to deliver superior returns on its asset base deployed. Two measures of earnings
quality considered in this study are: (i) Earnings per share; and (ii) %Operating Profit to
Total Assets. Liquidity looks at how well the firm manages and generates its cash to
overcome any asset liability mismatches in the near term. Two measures of liquidity
considered in this study are: (i) % loan to total deposits; and (ii) % Investment to total
deposits. Sensitivity to Market risk tells you how the share price of the banks have
reacted to changes to various risk such as commodity risk and interest rate risk and so on.
The 5 year CAGR is calculated as:
CAGR = {[Ending Value/ Beginning Value] (1/5 – 1)} x100
The CAGR or Mean for each of the above parameters is calculated a five year period
from the financial year ending April 2015 to financial year ending March 2020. Ranking
is done for each of these parameters based on the CAGR or Mean obtained. The average
rank for each category is determined. An overall CAMELS rank is developed based on
average rank of the CAGR’s or Mean of each of the above parameters and is used to rate
the banks.
The following 8 banks are chosen for the study based on their asset base and market
capitalization:
 Axis Bank
 Bank of Baroda (BoB)
 Central Bank of India (CBI)
 Housing Development Finance Corporation (HDFC)
 Industrial Credit and Investment Corporation of India (ICICI)
 IndusInd Bank
 Punjab National Bank (PNB)
 State Bank of India (SBI)
41
4.1.1 Capital Adequacy
4.1.1.1 Capital Adequacy Ratio
Capital Adequacy Ratio (capital to Risk Weighted Assets) is the most widely employed
measure of soundness of banks. It reflects bank’s ability to withstand shocks in the event
of adverse developments. Basel accord of 1988 played a very positive role in providing
financial stability and competitive equality forces different banks. However the ongoing
refinements have increased pressure on the bottom line of commercial banks. The overall
capital position of commercial banks has witnessed considerable improvements in the
post reform phase. These refinements have increased pressure on commercial banks to
raise capital from different alternatives and reduce exposure in assets that carries higher
degree of risk weight age without compromising earning opportunities. At present a
commercial bank has to keep 9% risk weighted asset which is a mandatory by RBI. But
most of the banks in India are above 12%. A higher ratio indicates it is safer because if
loans go bad, it can make up from its net worth.
Mea
Banks 2020 2019 2018 2017 2016 Rank
n
18.0
AXIS 16.00 17.00 15.00 15.00 16.20 3
0
13.0
BOB 13.00 12.00 13.00 13.00 12.80 6
0
12.0
CBI 10.00 9.00 11.00 10.00 10.40 8
0
19.0
HDFC 17.00 15.00 15.00 16.00 16.40 2
0
16.0
ICICI 17.00 18.00 17.00 17.00 17.00 1
0
15.0
INDUSIND 14.16 15.00 15.00 16.00 15.03 4
0
14.0
PNB 10.00 9.00 12.00 11.00 11.20 7
0
13.0
SBI 13.00 13.00 13.00 13.00 13.00 5
0
42
Comment:
The Capital Adequacy of private banks has been higher than the public sector banks. The
rank has been given on the basis of mean i.e. the bank with highest mean has been given
the topmost ranking and the bank with least mean has been given lowest ranking. From
the above table we can see that ICICI bank has the highest mean so it has been given the
1st rank and the bank with the lowest mean i.e. CBI bank has been ranked at 8th rank.
Given the current scenario of bank RBI has suggested banks to keep the Capital
Adequacy ratio between 10-12%.
4.1.1.2 Advances to Total Assets

Advances to Assets are the proportion of total advances to total assets. There is a direct
relationship with banks to get more profits. A competitive bank will try to get more
profits by giving its advances. This ratio points out that bank’s aggressiveness in lending
which in the long run results in higher profitability. There is a direct relationship in
between them. Higher ratio advances to assets but lower one will be taken into
consideration. It also includes receivables whereas total assets exclude the re-evaluation
of assets.
202 201
Banks 2019 2017 2016 Cagr Rank
0 8
AXIS 0.62 0.62 0.64 0.62 0.64 -0.006 5
BOB 0.60 0.60 0.59 0.55 0.57 0.008 2
CBI 0.42 0.44 0.48 0.42 0.59 -0.064 8
HDFC 0.65 0.66 0.62 0.64 0.66 -0.002 3
ICICI 0.59 0.61 0.58 0.60 0.60 -0.006 4
INDUSIND 0.67 0.67 0.65 0.63 0.63 0.013 1
PNB 0.57 0.59 0.57 0.58 0.62 -0.017 7
SBI 0.59 0.59 0.56 0.58 0.62 -0.011 6
43
Comment
Assets provides securities for the liabilities that an enterprise incur. Advances are the
major source of income for the banks so increase in the advances is a good sign for the
bank. An increase in Advances to total ratio shows the growth of the bank. In the above
table only two banks have positive Cagr that shows that remaining banks have struggled
to increase their ratio. The bank with the topmost rank is IndusInd Bank and the bank
with the least rank is CBI bank.
4.1.2 Asset Quality

“Good Quality Assets” are the assets that have the capacity to generate maximum value
with minimum risk characteristic. The issue of maintaining good quality asses continues
to be the biggest challenge before Indian Banking sector. One of the major constraints of
the competitive efficiency of banks is the tendency to accumulate poor quality assets. A
good quality Asset is indicative of efficient credit administration i.e. standard credit
appraisal; effective follow up and efficiency recover of loans. Nothing is true indicator of
the quality of assets than the incidence of the quantum of NPAs in relation to total
portfolio. High level of NPAs demonstrates poor asset quality of banks and this has
serious implication not only for current earnings of banks but also their future income.
Significant amount of funds are locked in loan due to their non-recovery on time and this
further aggravates the problem for banks due to provisioning requirements for NPAs
classification. Bank with adequate credit risk management practices are expected to have
lower NPAs. Various Asset Quality Ratios have been used to analyses the quality of
assets in Banks.
4.1.2.1 % Net NPA to Advances

A nonperforming asset (NPA) refers to a classification for loans or advances that are in
default or in arrears. A loan is in arrears when principal or interest payments are late or
missed. A loan is in default when the lender considers the loan agreement to be broken
44
and the debtor is unable to meet his obligations. Nonperforming assets are listed on
the balance sheet of a bank or other financial institution. After a prolonged period of non-
payment, the lender will force the borrower to liquidate any assets that were pledged as
part of the debt agreement. If no assets were pledged, the lender might write-off the asset
as a bad debt and then sell it at a discount to a collection agency.
In most cases, debt is classified as nonperforming when loan payments have not been
made for a period of 90 days. While 90 days is the standard, the amount of elapsed time
may be shorter or longer depending on the terms and conditions of each individual loan.
A loan can be classified as a nonperforming asset at any point during the term of the loan
or at its maturity. Net NPA to Advances (loans) Ratio is the ratio of Net NPA to
advances. It is used as a measure of the overall quality of the bank’s loan book.
Banks 2020 2019 2018 2017 2016 Mean Rank

AXIS 3.64 3.71 3.77 2.31 0.74 2.84 3
BOB 3.13 3.33 5.49 4.72 4.96 4.33 6
CBI 7.63 7.73 0.00 10.20 7.36 6.58 7
HDFC 0.36 0.39 0.40 0.33 0.28 0.35 1
ICICI 1.57 2.29 5.43 5.43 2.98 3.54 4
INDUSIN
0.91 1.21 0.51 0.39 0.36 0.68 2
D
11.2
PNB 5.77 6.55 7.80 8.59 7.99 8
2
SBI 2.23 3.01 5.73 3.71 3.81 3.70 5
Comment
Lately NPA’s have been the major hurdle in the growth of the bank. With the events like
Demonetisation and Goods & Services Tax (GST) NPA’s of the banks has been on the
rise. NPA to Advances of 1% is said to be good but as we can clearly see most of the
bank have more than 2% NPA to Advances. The bank with the lowest mean has been
45
ranked at the top and the bank with the highest mean has been ranked lowest. In the
above table HDFC has the least mean so it stood at number 1 position and PNB with the
highest mean has been ranked last. The growth in the NPA’s to Advances of public sector
bank is matter of concern.
4.1.2.2 %Investments to Total Assets

The ratio tells you about the amount of investments it is holding to its total assets.
Investments provides protection to the other assets in the balance sheet. Increase in the
ratio year by year means the banks has a good asset quality.
Banks 2016 2017 2018 2019 2020 Cagr Rank

21.4 21.8
AXIS 23.22 22.26 17.13 -5.91% 8
1 4
18.6 23.3
BOB 17.94 22.66 23.72 5.74% 2
6 4
27.6 37.8
CBI 29.09 31.46 39.98 6.57% 1
2 9
24.8 23.3
HDFC 23.12 22.76 25.60 2.06% 4
3 5
20.9 21.5
ICICI 22.26 23.09 22.72 0.41% 6
3 4
INDUSIN 20.5 21.3
22.29 22.60 19.53 -2.60% 7
D 4 3
25.9 26.0
PNB 23.65 26.16 28.95 4.12% 3
2 8
28.3 26.2
SBI 24.42 30.71 26.50 1.65% 5
1 7
Comment
46
Investments is an important part of assets as the returns are not received from the
company’s activities but from investing in different securities. Investments can play
important role during the tough period of banks. In the above the bank with highest Cagr
growth has been ranked first and the bank with the least Cagr growth has been ranked
last. Here CBI has been given the first rank with the highest Cagr growth of 6.57% and
Axis bank has been ranked last with the negative growth of -5.91%.
4.1.3 Management Efficiency

Though it is difficult to quantify the performance of management, an attempt has been
made to analyse the level of efforts. Initiative effort, dynamism and vision of managers
play a significant role in overall l functioning of banks on profit line. So for this purpose
following ratios has been taken into consideration.
4.1.3.1 Net Profit per Employee

Profit per Employee is a measure of Net Income for the past twelve months (LTM)
divided by the current number of Full-Time Equivalent employees. Because labour needs
differ across sectors, this ratio is often used to compare companies within the same
industry. Mostly used to compare companies within the same industry to one another,
geography, labour costs, and company stage will all impact this ratio. Unlike Revenue per
Employee and Expenses per Employee, this ratio considers both income and costs. This
makes it a good summary metric, but hides some details that are exposed by the other two
KPIs. As with any metric that measures employee efficiency, improvements are gained
either with investments in training and culture or by investing in processes and
automation (the latter can also be used to reduce the number of employees needed).
Banks 2020 2019 2018 2017 2016 CAGR Rank

AXIS 219478.74 755022.33 46244.39 649854.14 1640303.74 -33.12% 6
BOB 64803.99 77756.3 -442147.67 263856.54 -1037184.46 -157.43% 7
CBI -334921.99 -1581353.86 -1385581.36 -658432.59 -376327.45 -2.30% 4
47
HDFC 2244771.35 2149495.24 1981431.6 1725424.39 1404398.73 9.83% 1
ICICI 798519.16 387642.38 819281.33 1183120.75 1347597.82 -9.94% 5
INDUSIND 1440279.32 1190056.56 1426193.44 1132927.51 991522.16 7.75% 2
PNB 48878.96 -1408768.54 -1639961.57 179223.45 -561347.44 -161.37% 8
SBI 580806.85 335468.72 -247971.1 500274.5 478997.86 3.93% 3
Comment
Banks Efficiency can be achieved with getting optimal results with minimum resources.
Net profit per Employee tells you how efficiently the bank is managing its employees. In
the above table the bank with the highest Cagr is been ranked first and the bank with the
lowest Cagr has been ranked last. HDFC has gained the topmost spot with Cagr growth
of 9.83% and PNB bank is been last with the negative Cagr growth of -161.37%. The
ratio of CBI and PNB bank has been the worst.
4.1.3.2 Business per Branch

Business per Branch represents business generated by each branch in banks. Business per
branch ratio is directly proportional to productivity of bank and thus manager’s ability to
manage human assets efficiently to generate higher level of earnings. Business per branch
has also increased consistently over the period of study is evidenced form the below
table. This is sign of increase in productivity of employee of select banks.
Banks 2020 2019 2018 2017 2016 Cagr Rank

AXIS 163410991.9 168432243 149842826.7 139083338.5 138973029.5 3.29% 6
BOB 194120422.8 198641972.5 185226664.3 187892864.6 184119500.3 1.06% 8
CBI 138844133.1 125124260 122514734 117716759.3 118400895.7 3.24% 7
HDFC 183054361.6 177699813.9 163972185.7 142094024.1 115472348.9 9.65% 2
ICICI 142596981.9 142868072.1 129753214.8 115193098.7 118696176 3.74% 5
INDUSIND 133279969.9 137445981.6 117304553 94672011.69 78672891.59 11.12% 1
PNB 170930059.7 160186321.7 143658746.4 140856500.5 136350747.6 4.62% 4
48
SBI 223169169.3 150243980 175776620.8 172538127.5 153770974.8 7.73% 3
Comment
Business per branch tells you how efficiently the manager has managed the resources of
the bank. The bank with the highest Cagr growth has been given topmost rank and the
bank with the least Cagr growth has been ranked lowest. Indusind Bank has achieved
highest efficiency with the Cagr growth of 11.12% and BOB has been last in achieving
the efficiency so it has been ranked last.
4.1.4 Earnings Quality

Sustainable high level of earning enables a bank to boost its capital and improve
economic performance. Here is negative relationship between profitability and
probability of failure for any business organisation. As banking is a profit making
organisation the level of conducting the performance appraisal is important to them. For
the purpose of such evaluation following ratios have been discussed for each of the
nationalized commercial banks.
4.1.4.1 Operating Profit to total assets
The operating return on assets ratio (ROA) is used to calculate the percentage rate of
return a business gets on its assets. The ratio measures the ability of a business to use its
assets to generate operating income. The formula uses the operating income of the
business which is the income the business generates before interest and tax expenses have
been deducted. Excluding the interest and tax expenses allows comparisons to be made
between different businesses independent of how they are financed and the tax
environment they operate in.
mea
Banks 2020 2019 2018 2017 2016 Rank
n
49
- -
AXIS -1.05 -1.54 -0.21 -1.13 6
1.51 1.33
- -
BOB -0.75 -1.26 -1.54 -1.03 5
0.84 0.77
- -
CBI -2.43 -2.36 -1.09 -1.76 8
1.33 1.59
HDFC 0.19 0.27 0.21 0.26 0.21 0.23 1
- -
ICICI -1.15 -1.21 -0.77 -1.03 4
0.77 1.25
- -
INDUSIND -0.84 -0.51 -0.72 -0.72 2
0.82 0.72
- -
PNB -2.23 -2.76 -1.62 -1.75 7
1.07 1.05
- -
SBI -0.93 -1.48 -0.75 -0.97 3
0.77 0.92
Comment
The earnings of the bank is directly proportionate to operating profit. Operating profit to
total assets tells how efficiently they have used the assets of the company in order to
generate operating profit. In the above table the bank with the highest mean has been
ranked first and bank with least mean has been ranked last. HDFC bank the only bank
with positive Cagr growth has been the top bank in terms of operating profit to total
assets. CBI with the least Cagr growth has been ranked last.
4.1.4.2 Earnings per Share (EPS)
Earnings per share (EPS) is calculated as a company's profit divided by the outstanding
shares of its common stock. The resulting number serves as an indicator of a company's
profitability. It is common for a company to report EPS that is adjusted for extraordinary
items and potential share dilution. The higher a company's EPS, the more profitable it is
considered to be. Earnings per share (EPS) is a company's net profit divided by the
50
number of common shares it has outstanding. EPS indicates how much money a company
makes for each share of its stock, and is a widely used metric to estimate corporate value.
A higher EPS indicates greater value because investors will pay more for a company's
shares if they think the company has higher profits relative to its share price. EPS can be
arrived at in several forms, such as excluding extraordinary items or discontinued
operations, or on a diluted basis.
Banks 2020 2019 2018 2017 2016 CAGR Rank
AXIS 5.99 18.20 1.13 15.40 34.59 -29.58% 6
BOB 1.36 1.64 -10.53 6.00 -23.89 -156.37% 8
-
CBI -1.81 -20.19 -19.50 -8.55 -26.69% 5
13.35
48.0
HDFC 78.65 67.76 57.18 48.84 -0.34% 3
1
12.2
ICICI 5.23 10.56 15.31 16.75 -6.02% 4
8
63.7
INDUSIND 54.90 60.19 48.06 39.68 9.95% 1
5
PNB 0.62 -30.94 -55.39 6.45 -20.82 -149.52% 7
16.2
SBI 0.97 -7.67 13.43 12.98 4.57% 2
3
Comment
Another earnings ratio which is EPS that calculates the earning of the banks on per share
basis. The growth in the EPS is a positive sign for a bank. It is an important ratio from an
investor point of view. In the above table the bank with the Cagr growth has been ranked
first and the bank with the least Cagr growth has been ranked last. Here, Indusind bank
has been given the first rank and BOB has been given last rank.
4.1.5 Liquidity
Liquidity Management is one of the essential functions of treasury department of banks
to meet different demands of funds. A bank must maintain highly liquid assets in
sufficient amount to meet deposit with drawls as well as legitimate loan request.
51
Liquidity ratio provides the primary means of judging bank’s Liquidity position. In
Banking there is no universally recognized liquidity ratio as liabilities are not Predictable.
In case of non-financial firms, liabilities have fixed maturities while large portion of
bank’s liabilities are repayable on demand.
4.1.5.1 %Investment to total deposits

Investment deposit is a term deposit with investment risk. The interest of the investment
deposit is not guaranteed and the receiving of the interest depends on the price
movements of the underlying assets. Maximum interest investment Deposit enables a
bank to earn potentially higher interest rates than normal time deposits. RBI releases
investment to deposit rates. The investment-to-deposit ratio is “what is the relative worth
of investment compared with total deposits”. It is a very crucial determinant of any bank
for measuring efficiency in deposit management. Because a bank take deposits from their
valued customers and it has to ensure security by investing their money in profitable
sector. So ability to pay profit to the depositors depends on the bank’s earnings.
Banks 2016 2017 2018 2019 2020 Cagr Rank

31.0 31.9
AXIS 34.08 33.92 24.49 -6.40% 8
8 0
21.5 28.5
BOB 20.98 27.60 29.03 6.71% 1
4 4
31.0 41.7
CBI 33.39 34.81 45.42 6.35% 2
4 9
33.3 31.4
HDFC 29.99 30.71 34.15 2.63% 4
2 8
32.9 31.8
ICICI 38.06 36.19 32.37 -3.19% 7
6 2
INDUSIN 29.0 30.4
33.56 33.02 29.69 -2.42% 6
D 0 1
30.0 29.9
PNB 28.54 31.19 34.16 3.66% 3
3 0
37.4 33.2
SBI 33.26 39.20 32.30 -0.59% 5
6 2
52
Comment
Deposits are liabilities for the banks so a good amount of investments provide liquidity to
banks if something goes wrong. An increase in the ratio is a positive sign for banks. The
bank with highest Cagr has been ranked first and bank with least Cagr growth has been
ranked last. HDFC is the only private commercial bank with positive Cagr growth this
shows that public sector banks clearly have an edge over private sector banks. The bank
with highest Cagr growth has been ranked first i.e. BOB and the bank with the least
growth i.e. Axis bank has been ranked last.
4.1.5.2 Cash to Total Deposits

The amount of money a bank should have available as a percentage of
the total amount of money its customers have paid into the bank.
This amount is calculated so that customers can be sure that they will be able to
take their money out of the bank if they want to. Cash is the most liquid assets and hence
availability of cash helps to overcome unforeseen circumstances.
202
Banks 2019 2018 2017 2016 Cagr Rank
0
AXIS 10.1 7.04 7.64 6.89 6.2 10.25% 1
BOB 3.74 4.01 3.81 3.78 3.71 0.16% 5
15.8
CBI 8.28 9.55 18.78 5.4 8.92% 2
4
HDFC 5.75 8.85 9.95 5.71 5.77 -0.07% 6
ICICI 5.14 5.85 6.17 6.45 6.74 -5.28% 7
INDUSIND 5.96 6.04 6.73 5.59 5.12 3.08% 3
53
PNB 5.11 4.62 4.27 4.4 4.81 1.22% 4
SBI 5.59 5.83 5.86 6.82 7.42 -5.51% 8
Comment
This ratio tells us the liquidity state of the bank. The higher the ratio the better it is for
banks. In the above table the bank with highest Cagr growth has been ranked first and the
bank with lowest Cagr Growth has been ranked lowest. Here Axis bank has been given
the first rank because of the Cagr growth of 10.25% and SBI has been given last rank
because of the negative Cagr growth of -5.51%.
4.1.6 Sensitivity to Market Risk:

In recent years, size of operation of banks has increased manifold. Now the banks are
entering into non-traditional activities in the financial services sector. Due to increased
exposure of banks to various activities, the risks associated with them have also
increased. Thus, the importance of managing risks, which arises out of deficiencies, in
interest rate risk and credit rate risk cannot be ignored.
Banks 2015-16 to 2019-20 Rank

AXIS 1.274 2
BOB 1.566 4
CBI 1.579 6
HDFC 0.777 1
ICICI 1.569 5
INDUSIN 1.368 3
54
D
PNB 1.772 8
SBI 1.666 7
Comment
The Calculation sensitivity to market risk is done on the share price of the banks. The
fluctuation in the value of share price of various banks due to external factors is taken
into consideration. The calculation of β will tells us how much volatile a stock is to
market changes. When the value of β is more than 1 the stock is considered highly
volatile and when the β is less than 1 then it is said that the bank is less volatile to market
risk. In the above table HDFC bank is only stock having a β value less than 1 hence it has
been ranked first. The bank with last rank is PNB having a β value of 1.772.
4.2 Overall Rating (as per CAMELS)
The overall ranking of the bank has been given on the basis of mean i.e. the bank with
least overall mean has been given the first rank and the bank with highest mean has been
given the last rank. Camels rating models tells you about the top three banks that you
have taken in the study. According to Camels rating the topmost banks with a good
performance is HDFC bank, the bank who was behind HDFC bank is Indusind bank and
the third rank goes to BOB. According to Camels rating the worst performing bank is
PNB.
Capital Asset Management Sensitivity to Overall
Banks Earning Liquidity
Adequacy Quality Efficiency Market Risk Rank
AXIS 5 7 7 5 5 2 6
BOB 4 2 8 7 2 4 3
CBI 8 3 5 6 1 6 5
HDFC 2 1 2 2 6 1 1
55
ICICI 3 5 4 4 8 5 4
INDUSIND 1 4 1 1 4 3 2
PNB 7 8 6 8 3 8 8
SBI 6 6 3 3 7 7 7
4.3 EAGLES Rating Model
This part main objective is to analyse and compare the financial performance of Selected
public and private sector Banks. As it has been discussed earlier this research is based on
the six broad parameters of financial management such as Earnings, Asset Quality,
Growth, Liquidity, Equity and strategy that are essential for financial viability of any
bank. These parameters are nomenclature as EAGLES. The performance of these banks
has been discussed in the following sections based on the above mentioned parameters.
The ratio taken for Eagles model are as follows:
4.3.1 Earning Appraisal:

Sustainable high level of earning enables a bank to boost its capital and improve
economic performance. Here is negative relationship between profitability and
probability of failure for any business organisation. As banking is a profit making
organisation the level of conducting the performance appraisal. For the purpose of such
evaluation following ratios have been discussed for each of the nationalized commercial
banks.
4.3.1.1 Return on Assets

Return on Assets (ROA) is one of the widely used measures of profitability. ROA is
measured as net profit as a percentage of total assets. A bank with higher level of ROA is
inherently sounder than one with a lower level of ROA. ROA is also used for deciding
56
PCA rigger and target ratio by the supervisors. A bank operating on sound commercial
line is expected to exhibit healthy ROA.
Banks 2020 2019 2018 2017 2016 Cagr Rank

AXIS 0.17 0.58 0.03 0.61 1.56 -35.81% 6
BOB 0.04 0.05 -0.33 0.19 -0.8 -154.93% 7
CBI -0.31 -1.7 -1.56 -0.73 -0.46 -7.59% 5
HDFC 1.71 1.69 1.64 1.68 1.73 -0.23% 1
ICICI 0.72 0.34 0.77 1.26 1.34 -11.68% 4
INDUSIND 1.43 1.18 1.62 1.6 1.63 -2.58% 2
PNB 0.04 -1.28 -1.6 0.18 -0.59 -158.38% 8
SBI 0.36 0.02 -0.18 0.38 0.42 -3.04% 3
Comment
The ratio shows how profitable a bank’s assets are in generating revenue. A lower RoA
means that bank is not able to utilise assets efficiently. Negative RoA implies the bank’s
assets are yielding negative return. The bank with highest Cagr growth has been given the
highest rank and the bank with the least Cagr growth has been given the lowest rank. As
we can see all the banks have a negative Cagr growth that means that banks have failed to
generate good return on their assets. HDFC bank has been given the first rank and PNB
with least Cagr growth has been given the last rank.
4.3.1.2 Return on Equity

It measures the rate of return on shareholders’ invested. It is a proportion of profit after
tax to net worth of the business. It indicates the bank’s ability to generate income on the
investment of shareholders’ funds. Return on net worth is directly proportional to banks
profitability.
Banks 2020 2019 2018 2017 2016 Cagr Rank

AXIS 1.91 7.01 0.43 6.59 15.46 -34.18% 6
57
BOB 0.76 0.94 -5.6 3.43 -13.42 -156.31% 8
-
CBI -5.23 -29.79 -28.38 -9.85 -11.89% 5
14.12
15.3
HDFC 14.12 16.45 16.26 16.91 -1.92% 3
5
ICICI 6.99 3.19 6.63 10.11 11.19 -8.98% 4
12.8
INDUSIND 12.52 15.35 14.14 13.2 -0.55% 2
4
PNB 0.58 -24.2 -32.85 3.47 -11.2 -155.31% 7
SBI 6.95 0.39 -3.37 6.69 6.89 0.17% 1
Comment
The amount of return generated on total shareholder funds is known as return on equity
or return on net worth. Return on equity of the banks has not been great apart from SBI
rest all banks have struggled to generate positive Cagr growth. Return on equity of BOB
and PNB has been the worst. SBI being the only bank with positive Cagr growth has
gained the top position and the bank with the worst return on equity i.e. BOB has been
ranked last.
4.3.1.3 Return on Capital Employed (ROCE)

Return on capital employed (ROCE) is a financial ratio that can be used in assessing a
company's profitability and capital efficiency. In other words, this ratio can help to
understand how well a company is generating profits from its capital as it is put to use.
The ROCE ratio is one of several profitability ratios financial managers, stakeholders,
and potential investors may use when analyzing a company for investment.
202 201
Banks 2019 2017 2016 Cagr Rank
0 8
AXIS 2.68 2.47 2.34 3.05 3.15 -3.18% 7
BOB 1.77 1.78 1.72 1.63 1.36 5.41% 2
CBI 1.27 0.96 0.85 0.95 0.90 7.13% 1
HDFC 3.33 3.34 3.20 3.18 3.17 0.99% 4
58
ICICI 2.67 2.52 2.91 3.59 3.47 -5.11% 8
INDUSIND 3.62 3.00 3.11 3.21 3.11 3.08% 3
PNB 1.80 1.70 1.38 2.06 1.87 -0.76% 5
SBI 1.79 1.62 1.81 1.99 1.96 -1.80% 6
Comment
The amount of return generated on the capital employed for different activities is known
as return on Capital employed. The bank with the highest Cagr growth has been ranked
first and the bank with lowest. In the above table BOB bank has been given the first rank
and ICICI bank has been given last rank.
4.3.2 Asset Quality

Good Quality Assets” are the assets that have the capacity to generate maximum value
with minimum risk characteristic. The issue of maintaining good quality asses continues
to be the biggest challenge before Indian Banking sector. One of the major constraints of
the competitive efficiency of banks is the tendency to accumulate poor quality assets. A
good quality Asset is indicative of efficient credit administration i.e. standard credit
appraisal; effective follow up and efficiency recover of loans. Nothing is true indicator of
the quality of assets than the incidence of the quantum of NPAs in relation to total
portfolio. High level of NPAs demonstrates poor asset quality of banks and this has
serious implication not only for current earnings of banks but also their future income.
Significant amount of funds are locked in loan due to their non-recovery on time and this
further aggravates the problem for banks due to provisioning requirements for NPAs
classification. Bank with adequate credit risk management practices are expected to have
lower NPAs. Various Asset Quality Ratios have been used to analyses the quality of
assets in Banks.
59
4.3.2.1 Gross NPA’s
Gross NPA’s are the sum total of all loan assets that are classified as NPAs as per RBI
guidelines as on Balance Sheet date. Gross NPA reflects the quality of the loans made by
banks. It consists of all the nonstandard assets like as sub-standard, doubtful, and loss
assets. It can be calculated with the help of following ratio:
Gross NPAs Ratio = Gross NPAs / Gross Advances Ratio
Mea
Banks 2020 2019 2018 2017 2016 Rank
n
AXIS 5.00 5.00 7.00 5.00 2.00 4.80 3
BOB 9.00 10.00 12.00 10.00 10.00 10.20 6
19.0
CBI 19.00 21.00 18.00 12.00 17.80 8
0
HDFC 1.00 1.00 1.00 1.00 1.00 1.00 1
ICICI 6.00 7.00 0.00 9.00 6.00 5.60 4
INDUSIND 2.00 2.00 1.00 1.00 1.00 1.40 2
14.0
PNB 16.00 18.00 13.00 13.00 14.80 7
0
SBI 6.00 8.00 11.00 7.00 7.00 7.80 5
Comment
During this 5 years the NPA’s of all the banks has been on the rise. Public sector banks
have struggled to keep their NPA’s below 1. The bank with the lowest mean has been
ranked first and the bank with highest mean has been ranked last. Here in the above table
HDFC bank has been given the first rank because of its least mean and the bank with
highest mean i.e. CBI has been ranked last.
4.3.2.2 Net NPA’s

Net NPA stands for Net Non-Performing Assets. Net NPA is a term used by commercial
banks to indicate less allowance for poor and uncertain debts than the amount of non-
60
performing loans. In order to cover unpaid debts, commercial banks tend to offer a
precautionary amount. Thus, if one deducts the provision for unpaid loans from unpaid
obligations, the resulting sum relates to the net non-performing assets.
Net NPA = (Total Gross NPA) - (Provision for Unpaid Debts)/Gross Advances
Banks 2020 2019 2018 2017 2016 Mean Rank

AXIS 1.56 2.00 4.00 2.00 1.00 2.11 3
BOB 3.13 3.33 5.00 5.00 5.00 4.29 6
11.0
CBI 7.63 8.00 10.00 7.00 8.73 8
0
HDFC 0.36 0.39 0.40 0.33 0.28 0.35 1
ICICI 1.54 2.29 5.00 5.00 3.00 3.37 4
INDUSIN
0.91 1.21 1.00 0.39 0.35 0.77 2
D
11.0
PNB 5.78 6.56 8.00 9.00 8.07 7
0
SBI 2.23 3.00 6.00 4.00 4.00 3.85 5
Comment
During this 5 years the NPA’s of all the banks has been on the rise. Public sector banks
have struggled to keep their NPA’s below 1. The bank with the lowest mean has been
ranked first and the bank with highest mean has been ranked last. HDFC bank has
managed to keep its mean NPA below 1 so it has been ranked first and CBI bank being
the worst bank in terms of NPA has been ranked last.
4.3.3 Growth
A higher growth of loans and deposits are the maximum essential signs of how a banks
wants to function itself in the market. An excessive growth in loan without a
corresponding growth in deposits signifies an aim to increase interest margin. A higher
61
deposit without a corresponding increase in loans means that the bank suffers from low
interest margins.
4.3.3.1 Advances
Loans are the effective rate of return on the Bank’s investment in loans. Higher Loans
growth indicates higher earning capacity of the bank.
Banks 2020 2019 2018 2017 2016 Cagr Rank

AXIS 571,424.16 494,797.97 439650.3 373,069.35 338,773.72 11.02% 4
BOB 690,120.73 468,818.74 427,431.83 383,259.22 383,770.18 12.45% 3
CBI 151,100.88 146,525.36 156542.18 139,398.77 180,009.59 -3.44% 8
HDFC 993,702.88 819,401.22 658333.09 554,568.20 464,593.96 16.42% 2
ICICI 645,289.97 586,646.58 512395.29 464,232.08 435,263.94 8.19% 6
INDUSIN
206,783.17 186,393.50 144953.66 113,080.51 88,419.34 18.52% 1
D
PNB 471,827.72 458,249.20 433,734.72 419,493.15 412,325.80 2.73% 7
2,185,876.9 1,571,078.3
SBI 2,325,289.56 1,934,880.19 1,463,700.42 9.70% 5
2 8
Comment
Lending people money is one of the core business activity of the bank. So the increase in
the advances means that the bank is growing in its core activities. The bank with the
highest Cagr growth in advances is ranked first and the bank with the lowest Cagr growth
has been ranked last. In these 5 years the advances of Indusind bank has grown
exponentially therefore gaining the top spot. CBI is the only bank with negative Cagr
growth and therefore they are ranked last.
4.3.3.2 Deposits
Deposit is the amount accepted by bank from the savers in the form of current deposits,
savings Deposits and fixed deposits and interest is paid to them.
62
Banks 2020 2019 2018 2017 2016 Cagr Rank
AXIS 640,104.94 548,471.34 453622.72 414,378.79 357,967.56 12.33% 5
BOB 945,984.43 638,689.72 591,314.82 601,675.17 574,037.87 10.51% 6
CBI 313,763.16 299,855.44 294838.86 296,671.19 266,184.19 3.34% 8
HDFC 1,147,502.31 923,140.93 788770.64 643,639.66 546,424.19 16.00% 2
ICICI 770,968.99 652,919.67 560975.21 490,039.06 421,425.71 12.84% 4
INDUSIN
202,039.81 194,867.91 151639.17 126,572.22 93,000.35 16.79% 1
D
PNB 703,846.32 676,030.14 642,226.19 621,704.02 553,051.13 4.94% 7
2,911,386.0 2,044,751.3
SBI 3,241,620.73 2,706,343.29 1,730,722.44 13.37% 3
1 9
Comment
Deposit is the amount that the customers deposit with the bank. Deposits money is used
in various ways by the bank to generate return. Deposits and Advances are directly
related the more the amount of deposits with the bank the more advances will be given by
bank. The bank with highest Cagr growth has been ranked first and the bank with lowest
Cagr growth has been ranked last. Indusind bank has been given first rank and CBI has
been given last rank.
4.3.4 Liquidity
Liquidity Management is one of the essential functions of treasury department of banks
to meet different demands of funds. A bank must maintain highly liquid assets in
sufficient amount to meet deposit with drawls as well as legitimate loan request.
Liquidity ratio provides the primary means of judging bank’s Liquidity position. In
Banking there is no universally recognized liquidity ratio as liabilities are not Predictable.
In case of non-financial firms, liabilities have fixed maturities while large portion of
bank’s liabilities are repayable on demand.
63
4.3.4.1 Cash to Total Deposits
The amount of money a bank should have available as a percentage of
the total amount of money its customers have paid into the bank.
This amount is calculated so that customers can be sure that they will be able to
take their money out of the bank if they want to. Cash is the most liquid assets and hence
availability of cash helps to overcome unforeseen circumstances.
201
Banks 2020 2018 2017 2016 Cagr Rank
9
AXIS 10.10 7.04 7.64 6.89 6.20 10.25% 1
BOB 3.74 4.01 3.81 3.78 3.71 0.16% 5
CBI 8.28 9.55 18.78 15.84 5.40 8.92% 2
HDFC 5.75 8.85 9.95 5.71 5.77 -0.07% 6
ICICI 5.14 5.85 6.17 6.45 6.74 -5.28% 7
INDUSIN
5.96 6.04 6.73 5.59 5.12 3.08% 3
D
PNB 5.11 4.62 4.27 4.40 4.81 1.22% 4
SBI 5.59 5.83 5.86 6.82 7.42 -5.51% 8
Comment
This ratio tells us the liquidity state of the bank. The higher the ratio the better it is for
banks. In the above table the bank with highest Cagr growth has been ranked first and the
bank with lowest Cagr Growth has been ranked lowest. Here Axis bank has been given
the first rank because of the Cagr growth of 10.25% and SBI has been given last rank
because of the negative Cagr growth of -5.51%.
4.3.4.2 %Investment to Total Deposits

Investment deposit is a term deposit with investment risk. The interest of the investment
deposit is not guaranteed and the receiving of the interest depends on the price
64
movements of the underlying assets. Maximum interest investment Deposit enables a
bank to earn potentially higher interest rates than normal time deposits. RBI releases
investment to deposit rates. The investment-to-deposit ratio is “what is the relative worth
of investment compared with total deposits”. It is a very crucial determinant of any bank
for measuring efficiency in deposit management. Because a bank take deposits from their
valued customers and it has to ensure security by investing their money in profitable
sector. So ability to pay profit to the depositors depends on the bank’s earnings.
Bank 2016 2017 2018 2019 2020 Cagr Rank

31.0 31.9
AXIS 34.08 33.92 24.49 -6.40% 8
8 0
21.5 28.5
BOB 20.98 27.60 29.03 6.71% 1
4 4
31.0 41.7
CBI 33.39 34.81 45.42 6.35% 2
4 9
33.3 31.4
HDFC 29.99 30.71 34.15 2.63% 4
2 8
32.9 31.8
ICICI 38.06 36.19 32.37 -3.19% 7
6 2
INDUSIN 29.0 30.4
33.56 33.02 29.69 -2.42% 6
D 0 1
30.0 29.9
PNB 28.54 31.19 34.16 3.66% 3
3 0
37.4 33.2
SBI 33.26 39.20 32.30 -0.59% 5
6 2
Comment
Deposits are liabilities for the banks so a good amount of investments provide liquidity to
banks if something goes wrong. An increase in the ratio is a positive sign for banks. The
bank with highest Cagr has been ranked first and bank with least Cagr growth has been
ranked last. HDFC is the only private commercial bank with positive Cagr growth this
shows that public sector banks clearly have an edge over private sector banks. The bank
with highest Cagr growth has been ranked first i.e. BOB and the bank with the least
growth i.e. Axis bank has been ranked last.
65
4.3.5 Equity
Equity level and capital adequacy have profound impact upon the bank. Not only is there
an international guideline (Basel I and II) that stipulates a bank must have a minimum
capital equivalent to 8% of risk adjusted asset, even RBI has mentioned a comfort zone of
10-12% of total CAR for banks in India.
4.3.5.1 Capital Adequacy

Capital Adequacy Ratio (capital to Risk Weighted Assets) is the most widely employed
measure of soundness of banks. It reflects bank’s ability to withstand shocks in the event
of adverse developments. Basel accord of 1988 played a very positive role in providing
financial stability and competitive equality forces different banks. However the ongoing
refinements have increased pressure on the bottom line of commercial banks. The overall
capital position of commercial banks has witnessed considerable improvements in the
post reform phase. These refinements have increased pressure on commercial banks to
raise capital from different alternatives and reduce exposure in assets that carries higher
degree of risk weight age without compromising earning opportunities. At present a
commercial bank has to keep 9% risk weighted asset which is a mandatory by RBI. But
most of the banks in India are above 12%. A higher ratio indicates it is safer because if
loans go bad, it can make up from its net worth.
Mea
Banks 2020 2019 2018 2017 2016 Rank
n
18.0
AXIS 16.00 17.00 15.00 15.00 16.20 3
0
13.0
BOB 13.00 12.00 13.00 13.00 12.80 6
0
12.0
CBI 10.00 9.00 11.00 10.00 10.40 8
0
19.0
HDFC 17.00 15.00 15.00 16.00 16.40 2
0
66
16.0
ICICI 17.00 18.00 17.00 17.00 17.00 1
0
15.0
INDUSIND 14.16 15.00 15.00 16.00 15.03 4
0
14.0
PNB 10.00 9.00 12.00 11.00 11.20 7
0
13.0
SBI 13.00 13.00 13.00 13.00 13.00 5
0
Comment
The Capital Adequacy of private banks has been higher than the public sector banks. The
rank has been given on the basis of mean i.e. the bank with highest mean has been given
the topmost ranking and the bank with least mean has been given lowest ranking. From
the above table we can see that ICICI bank has the highest mean so it has been given the
1st rank and the bank with the lowest mean i.e. CBI bank has been ranked at 8th rank.
Given the current scenario of bank RBI has suggested banks to keep the Capital
Adequacy ratio between 10-12%.
4.3.5.2 Equity Growth

Equity growth means increased value of share price over a given period of time. This
indicates how well the stocks of the company has contributed to the wealth of the
investors.
Banks 2020 2019 2018 2017 2016 Cagr Rank

AXIS 729.3 722.7 593.6 466 408.4 12.30% 3
BOB 92.7 112.45 156.8 165.15 125.4 -5.86% 6
CBI 18 31.1 73.05 84.25 62.4 -22.01% 8
HDFC 1,226.30 1,039.97 1,002.85 643.33 524.92 18.50% 2
ICICI 525.65 364.45 352.95 244.5 209.23 20.23% 1
INDUSIN 1,252.0
1,258.85 1,505.55 1,753.10 928.8 6.27% 5
D 5
67
PNB 60.45 77.5 171.35 135.55 91.3 -7.92% 7
SBI 318.45 293.65 313.25 260.35 179.9 12.10% 4
Comment
The performance of the banks are directly reflected on the share price of the banks. The
amount of money generated by banks in stock market can be used to pump up the
operations of the bank. In the above table the bank with highest Cagr growth has been
given the topmost spot and the bank with lowest Cagr growth has been given last spot.
ICICI bank with highest Cagr growth has gained top spot and CBI with negative Cagr
growth has been ranked last.
4.3.6 Strategy
This defines the management’s bandwidth of actions as regards to growth of income and
balance sheet. It assesses management’s ability to lend, to garner deposits, obtain fee
based income and to manage the operating cost. As to what an appropriate balance of the
three core banking activities will depend on the bank’s strategy. The higher the figure the
better combined with excellent risk controls.
4.3.6.1 % Interest Income to Income Expense

Higher Interest Income/Interest cost ratio signifies that interest income has grown more
than proportionate to increase in interest cost. The bank has been able to either control its
cost of deposits or has been able to grow its loan book faster to garner higher interest
income or has been able to increase its yield on advances faster than increase in its cost of
deposits i.e. lower maturity of assets compared to liabilities.
Banks 2020 2019 2018 2017 2016 Cagr Rank

129.0 124.3
AXIS 124.17 125.68 125.24 0.74% 6
5 7
BOB 111.5 109.90 103.35 95.95 95.13 3.23% 2
68
0
100.8
CBI 78.48 81.62 82.65 90.03 -4.89% 8
3
156.5 137.3
HDFC 152.86 156.08 143.93 2.65% 3
6 8
138.5 123.5
ICICI 131.76 127.95 122.16 2.32% 4
7 7
143.5
INDUSIND 136.09 140.03 137.59 89.54 9.90% 1
5
107.2
PNB 98.49 102.73 96.25 102.09 -1.69% 7
6
112.8 108.3
SBI 104.61 97.06 105.15 0.83% 5
8 0
Comment
The strategy formulated for operations directly reflects on the performance of the banks.
The amount of interest earned should be more than the interest incurred for a bank to be
successful. The growth in the interest earned over interest incurred is a positive sign for
the bank. In the above table Indusind bank with highest Cagr growth has been given first
rank and the bank with lowest Cagr growth i.e. CBI bank has been ranked last. The ratio
of interest earned of PNB and CBI has fallen instead of growing. This shows poor
strategy by these two banks.
4.4 Overall Ranking (as per Eagles):
Eagles rating model is one of the emerging model besides Camels rating model. This
model successfully predicted the Asian crisis in the 1980s. The bank has been ranked on
the basis of their overall ranking mean i.e. the bank with the lowest overall mean has
been given the top rank and the bank with highest overall mean has been ranked last.
According to Eagles rating model the topmost bank is Indusind bank and the bank that is
second is HDFC bank. Axis bank has been the worst performing private sector banks and
PNB has been the worst performing public sector banks. Apart from HDFC and Indusind
69
bank all the banks have been struggling in terms of growth. The current scenario of
Indian banks has been a matter of concern as India is known as a banking economy and
the growth has not been upto the mark.
Earning Asset Overall

Banks Growth Liquidity Equity Strategy
Appraisal Quality Rank
AXIS 7 3 4 5 3 6 6
BOB 6 6 5 2 6 2 3
CBI 4 8 8 1 8 8 7
HDFC 2 1 2 6 2 3 2
ICICI 5 4 6 8 1 4 5
INDUSIND 1 2 1 4 5 1 1
PNB 8 7 7 3 7 7 8
SBI 3 5 3 7 4 5 4
5 Findings Suggestion and Conclusion

Introduction:
In the present era banking sector has become a life blood of an economic environment.
Banking sector helps in supporting finance which is a legitimate financial system is vital
for healthful and vibrant financial system. The banking sector contains most important
aspects of the financial services Industry. The overall performance of any economic
system to a large extent is depending on the performance of the banking region. The
Banking Zone’s performance is visible as the replica of the financial activates of the
nation, as a healthful Banking technique acts as the bed rock of social, financial and
commercial boom of a country. It’s far critical to degree the overall performance of the
banking zone via a performance dimension system that offers an opportunity to evaluate
the overall performance of Indian banks. The prevailing supervisory system in the
70
banking sector is a enormous development over the earlier system in terms of frequency,
coverage and focus as additionally as the device employed.
Findings:
Findings based on Camel Model:
Capital Adequacy: Capital Adequacy Ratio (capital to Risk Weighted Assets) is the most
widely employed measure of soundness of banks. The more the Capital Adequacy the better
is for banks. The mean capital adequacy of private banks has been on the higher side as
compare to public sector banks. CBI having the least mean has just managed to keep its
capital adequacy above RBI guidelines.
Advances to Total Assets: Advances to Assets are the proportion of total advances to total
assets. There is a direct relationship with banks to get more profits. There has not been
exponential growth in advances to total assets. Only few banks managed a positive Cagr
growth.
Asset Quality:
Net NPA to Advances: Last 5 years has not been good for banking sector in terms of
NPA’s. With the increase in NPA’s the many banks have failed to keep the ratio below 1.
Only HDFC bank and IndusInd Bank. Performance of public sector banks has been
below par as some bank having mean NPA to Advances approximately 8 which is not a
good sign for Indian banking sector.
%Total Investment to Total Assets: The growth in this ratio of public sector banks has
been better than private sector banks. Axis bank has been the worst bank in terms of
%investment to total assets.
Management Efficiency:
71
Profit per Employee: Many banks have failed to make optimum use of their employees.
PNB and BOB has been the worst performing bank in this ratio. On the other hand Axis
bank is the only private sector bank with negative Cagr growth.
Business per Branch: This ratio tells you how efficient banks branches are in generating
revenues for banks. HDFC and IndusInd bank has the highest Cagr growth among all
banks.
Earnings Quality:
Operating profits to Total Assets: This ratio for most banks has been negative HDFC is
the only bank with positive Cagr growth.
Earnings per share (EPS): EPS of BOB and PNB has been the worst among all the banks.
IndusInd bank outperforms every bank in this ratio.
Liquidity:
Cash to total Deposit: Here public sector banks clearly have an edge over private sector
banks because of huge number of deposits. SBI has a least Cagr growth in terms of Cash
to total deposits.
Investment to total Deposit: BOB has been best bank in terms of this ratio and Axis bank
have struggled to keep positive Cagr growth.
Sensitivity to Market Risk: All the banks have a β value more than 1 except HDFC bank
making all the other banks highly volatile to market risk.
Eagle Rating Model:

Earning Appraisal: The Cagr growth in earning of private sector banks has been better
than public sector banks. PNB has been the worst in terms of earnings.
72
Asset Quality: Due to the rapid increase of NPA’s the public sector doesn’t have a sound
asset quality. HDFC bank has managed its NPA’s well and therefore they have the least
NPA’s
Growth: There is positive growth in Cagr for most of the banks which is a positive sign.
CBI is the only bank with negative Cagr growth in Advances.
Liquidity: Liquidity of public sector banks has been better than private sector banks.
ICICI banks has been last in terms of liquidity.
Equity: Equity growth of public sector banks has fallen exponentially. SBI being the
only public sector banks with positive Cagr growth.
Strategy: Strategy of private sector banks has been better than public sector banks. Here
IndusInd bank outperforms every other banks.
Suggestions:
 Capital is vital aspect of any Banking Institution. Risk Adequacy of Capital
desires to be targeted and aptly managed. Right here, Public sector Banks
discovered to be lagging behind their counter parts so it is cautioned that they
should give concern to their capital Management.
 In case of net NPA public sector Banks has reached to horrendous level and they
should not delay in framing out effective policies and remedies to catch up with
the expectations to their depositors.
73
 Every bank should develop its own “risk management system’ based on
CAMELS and EAGLES parameters. Risk management should also address
various relating to vulnerability in banks such as level of NPAs, exposure to
sensitive sectors, contingent liabilities, CRAR.
74

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Comparative Study of Selected Commercial Banks in India

Under the Guidance of

Smt. Mithibai Motibhen Kundnani College of Commerce & Economics

Name and Signature of Name and Signature

Name and Signature of the learner

To list who all have helped me is difficult because they are so

I would like to acknowledge the following as being idealistic

I take this opportunity to thank the University of Mumbai for

I would like to thank my Principal, Dr. CA. Kishore Peshori for

I take this opportunity to thank our Coordinator Dr.Sheetal

I would also like to express my sincere gratitude towards my

I would like to thank my College Library, for having provided

1.1 Indian Banking Sector: A Brief History

(a) Issue of currency notes

(c) Maintaining exchange value of the Rupee.

1.1.2 Post-independence Era:

1.1.3 Post-Reform Era

1.1.4 Performance of Commercial Banks during Post- Reforms Period

1.2 Major 8 Banks of India

Axis Bank Limited is an Indian private sector bank headquartered in

Holder's Name % Share Holding

1.2.2 Bank of Baroda

Bank of Baroda Subsidiaries

Holder's Name % Share Holding

1.2.3 Central Bank of India

Acquisition & Amalgamation:

Holder's Name % Share Holding

Holder's Name % Share Holding

1.2.6 IndusInd bank

Holder's Name % Share Holding

Punjab National Bank, abbreviated as PNB, is an Indian government owned bank

Schemes / Products / Services:

Punjab National Bank, is extensively catering to banking needs of Non-resident Indians,

Holder's Name % Share Holding

On 7 October 2013, Arundhati Bhattacharya became the first woman to be appointed

State Bank of India Services:

Holder's Name % Share Holding

2.1 Objective of the study

2.2 Significance of the study

2.4 Limitation of the study

2.5.3 Data Analysis

2.5.4 Techniques and Tools used

2.5.4.2 Camels Rating Model:

3.1 International Studies:

3.2 Indian Studies:

4.1 CAMELS Rating Model

Capital adequacy is a measure of how adequately capitalised a bank is in its ability to

4.1.1.2 Advances to Total Assets

4.1.2 Asset Quality

4.1.2.1 % Net NPA to Advances

Banks 2020 2019 2018 2017 2016 Mean Rank

4.1.2.2 %Investments to Total Assets

Banks 2016 2017 2018 2019 2020 Cagr Rank

4.1.3 Management Efficiency

4.1.3.1 Net Profit per Employee

Banks 2020 2019 2018 2017 2016 CAGR Rank

4.1.3.2 Business per Branch

Banks 2020 2019 2018 2017 2016 Cagr Rank

4.1.4 Earnings Quality

4.1.4.1 Operating Profit to total assets

4.1.4.2 Earnings per Share (EPS)

4.1.5.1 %Investment to total deposits

Banks 2016 2017 2018 2019 2020 Cagr Rank

4.1.5.2 Cash to Total Deposits