Performance Evaluation of Select RRBs in Maharashtra State: A Comparative Study Using Capital Adequacy Ratio’s of Camel Model

The performance evaluation of Vidharbha Konkan Gramin Bank (VKGB) and Maharashtra Gramin Bank (MGB) operating in Maharashtra state is carried out. A comparative evaluation is also performed between them by using Capital Adequacy of CAMEL Model Hence, this chapter embodies different ratios under Capital Adequacy of CAMEL model. The banking sector is a critical component of the financial system and cornerstone of the global economic system. Banks are one of the oldest financial institutions in the financial system, which play a vital role in the mobilization of deposits and the disbursement of credit among the different sectors of the economy. A sound banking system acts as a fuel injection that stimulates economic productivity and industrial development by mobilizing savings and investing them in high return endeavors. Various research reports show that countries with a well-developed banking system have high GDP rate and higher economic growth. In the recent past, banking regulators and policy makers have proposed banking regulation by using the CAMEL (Capital adequacy, Asset quality, Management efficiency, Earnings and Liquidity) rating model to evaluate and assess the performance and financial soundness of the bank. CAMEL rating system is an important internal supervisory method to assess and distinguish financial institutions. The Federal Financial Institutions Oversight Board of USA was introduced CAMEL model for the first time in 1979. Regulations of the banking sector always monitors the performance of the banks to ensure efficient financial system based on CAMEL ratios.