Examining the Financial Efficiency of Urban Co-Operative Banks in Kerala - A CAMEL Model Analysis
Keywords:
Cooperative Banking, CAMEL Mode, Financial Efficiency, Capital Adequacy
Abstract
Urban cooperative banks play an essential role in the economic liberation of millions of people in our nation. It has emerged as a social and healthy banking institution providing need-based and quality banking services to the middle class and the marginalised sections of the urban population. Sound financial health is a guarantee to the depositor’s shareholders, employees and the economic system as a whole. In this study, an attempt is made to evaluate the financial performance of UCB using the CAMEL Model. This model mainly measures the bank’s performance from the five parameters: Capital Adequacy, Asset Quality, Management Efficiency, Earning Capacity, and Liquidity. The study is based on secondary data drawn from the annual report. For analysis, data over ten years are used. Statistical tools like average and standard deviation are used. It is found that the bank’s overall performance is satisfied with its asset quality being good. It was in a decent recovery position, but its financial condition in terms of capital adequacy, liquidity, earning rate, and management efficiency metrics was shabby, needing quick intervention.
References
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Asher, M. G. (2007). Reforming governance and regulation of urban cooperative banks in India. Journal of Financial Regulation and Compliance, 15(1), 20–29. https://doi.org/10.1108/13581980710 726769/FULL/PDF
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Gupta, S., & Verma, R. (2008). Comparative Analysis of Financial Performance of Private Sector Banks in India: Application of CAMEL Model. Journal of Global Economy, 4(2), 160-180.
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Kaur,P.(2015). A Financial Per formance Analysis of the Indian Banking Sector Using CAMEL Model.
Kouser, R., & Saba, I. (2012). Gauging the financial performance of banking sector using CAMEL model: Comparison of conventional, mixed and pure Islamic banks in Pakistan. International Research Journal of Finance and Economics, 82(December 2018), 67–88.
Kumar, V., & Malhotra, B. (2017). A Camel Model Analysis of of Private Banks in India. EPRA International Journal of Economic and Business Review, 5(7), 87–93.
Mahesshwara. R & K.V.N. Prasad. (2010). Evaluating the perfor mance of Regional Rural Bank: an application of Camel Model. Pakistan Journal of commerce and
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Salem, J., &Zaidanin, A. (2020). A Study on Financial Performance of the Jordanian Commercial Banks using the CAMEL Model and Panel Data Approach. International Journal of Finance & Banking Studies (2147-4486), 9(4), 111–130.https://doi.org/10.20525/IJFBS. V9I4.978
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Sayed, G. J., & Sayed, N. S. (2013). Comparative Analysis of Four Private Sector Banks as per CAMEL Rating: Http://Dx.Doi.Org/10.1177/2278533720130204, 1(2), 31–46. https://doi.org/10.1177/2278533720130204
Sharma, S., & Patel, A. K. (2019). A study on performance rating of SBI Group: Camel model analysis. TRANS Asian Journal of Marketing & Management Research (TAJ MMR), 8(5), 36. https://doi.org/10.5958/2279-0667. 2019.00019.1
Tan, Y., &Floros, C. (2013). Risk, capital and efficiency in Chinese banking. Journal of International Financial Markets, Institutions and Money, 26(1), 378–393. https://doi.org/10.1016/J.INTFIN.2013.07.009
Weber, O. (2017). Corporate sustain ability and financial performance of Chinese banks. Sustainability Accounting, Management and Policy Journal, 8(3), 358–385. https://doi.org/10.1108/SAMPJ-09-2016-0066/FULL/PDF
Zedan, K. A. &Daas, G. (2017). Palestinian Banks Analysis Using CAMEL Model . International Journal of Economics and Financial Issues , 7 (1) 351-357 .https://dergipark.org.tr/en/pub/ijefi/issue/32002/353201
Asher, M. G. (2007). Reforming governance and regulation of urban cooperative banks in India. Journal of Financial Regulation and Compliance, 15(1), 20–29. https://doi.org/10.1108/13581980710 726769/FULL/PDF
Aspal, P. K., & Nazneen, A. (2014). An empirical analysis of capital adequacy in the Indian private sector banks. American Journal of Research Communication, 2(11), 28-42.
Bansal Rohit, & Mohanty Anoop. (2013). A Study on Financial Performance of Commercial Banks in India: Application of Camel Model. Al-Barkaat Journal of Finance and Management, 5(2), 18–35.
Barra, C., &Zotti, R. (2019). Bank performance, Financial stability and market concentration: evidence from Cooperative and non-co-operative banks.Annals of Public and Cooperative Economics, 90(1), 103–139. https://doi.org/10.1111/apce. 12217
Chander, R., & Chandel, J. K. (2010). Financial Viability of an Apex Cooperative Credit Institution — A Case Study of the HARCO Bank: Http://Dx.Doi.Org/10.1177/097324701000600206, 6(2), 61–70. https://doi.org/10.1177/097324701000600206
CHAO, C.-M., & LIN, H.-C. (2007). Problem loans and bank efficiencies: Information Sciences 2007, 376–382. https://doi.org/10.1142/9789812709677_0053
Chipalkatti, N., Ramesha, K., & Rishi, M. (2007). Depositor Discipline, Regulatory Control, And A Banking Crisis: A Study Of Indian Urban Cooperative Banks. Annals of Public and Cooperative Economics, 78(4), 567–594. https://doi.org/10.1111/J.1467-8292.2007.00344.X
Gupta, S., & Verma, R. (2008). Comparative Analysis of Financial Performance of Private Sector Banks in India: Application of CAMEL Model. Journal of Global Economy, 4(2), 160–180. https://doi.org/10.1956/jge.v4i2.124
Gupta, S., & Verma, R. (2008). Comparative Analysis of Financial Performance of Private Sector Banks in India: Application of CAMEL Model. Journal of Global Economy, 4(2), 160-180.
Kaur, H. V. (2010). Analysis of Banks in India—A CAMEL Approach: Http://Dx.Doi.Org/10.1177/097215091001100209, 11(2), 257–280.https://doi.org/10.1177/097215091001100209
Kaur, J., Kaur, M., & Singh, S. (2015). Financial performance analysis of selected public sector banks: A CAMEL Model approach. Inter national Journal of Applied Business and Economic Research, 13(6), 4327–4348.
Kaur,P.(2015). A Financial Per formance Analysis of the Indian Banking Sector Using CAMEL Model.
Kouser, R., & Saba, I. (2012). Gauging the financial performance of banking sector using CAMEL model: Comparison of conventional, mixed and pure Islamic banks in Pakistan. International Research Journal of Finance and Economics, 82(December 2018), 67–88.
Kumar, V., & Malhotra, B. (2017). A Camel Model Analysis of of Private Banks in India. EPRA International Journal of Economic and Business Review, 5(7), 87–93.
Mahesshwara. R & K.V.N. Prasad. (2010). Evaluating the perfor mance of Regional Rural Bank: an application of Camel Model. Pakistan Journal of commerce and
social science, (4), 2309-8619.
Majumder, Md. T. H., & Rahman, M. M. (2017). A CAMEL Model Analysis of Selected Banks in Bangladesh. SSRN Electronic Journal. https://doi.org/10.2139/SSRN.3068004
Maqbool, S., &Zameer, M. N. (2018). Corporate social responsibility and financial performance: An empirical analysis of Indian banks. Future Business Journal, 4(1), 84–93. https://doi.org/10.1016/J.FBJ.2017.12.002
Mondal, A., & Ghosh, S. K. (2012). Intellectual capital and financial performance of Indian banks. Journal of Intellectual Capital, 13(4), 515–530. https://doi.org/10.1108/14691931211276115/FULL/PDF
Ongore, V. O., & Kusa, G. B. (2013). Determinants of financial per formance of commercial banks in Kenya. International journal of economics and financial issues, 3(1), 237-252
Prasad, K. V. N., & Ravinder, G. (2012). A camel model analysis of nationalized banks in India. International Journal of Trade and Commerce, 1(1), 23–33.
Ramu, N. (2009). Dimensions of Non-performing Assets in Urban Cooperative Banks in Tamil Nadu: Http://Dx.Doi.Org/10.1177/097215090901000209, 10(2), 279–297.https://doi.org/10.1177/097215090901000209
Reddy, M., & Prasad, K. (2011). Evaluating Performance of Regional Rural Banks/:an Application of Camel Model. Journal of Arts, Science and Commerce, 6, 61–67.
Salem, J., &Zaidanin, A. (2020). A Study on Financial Performance of the Jordanian Commercial Banks using the CAMEL Model and Panel Data Approach. International Journal of Finance & Banking Studies (2147-4486), 9(4), 111–130.https://doi.org/10.20525/IJFBS. V9I4.978
Sathye, M. (2003). Efficiency of banks in a developing economy: The case of India. European Journal of Operational Research, 148(3), 662–671. https://doi.org/10.1016/S0377-2217(02)00471X
Sayed, G. J., & Sayed, N. S. (2013). Comparative Analysis of Four Private Sector Banks as per CAMEL Rating: Http://Dx.Doi.Org/10.1177/2278533720130204, 1(2), 31–46. https://doi.org/10.1177/2278533720130204
Sharma, S., & Patel, A. K. (2019). A study on performance rating of SBI Group: Camel model analysis. TRANS Asian Journal of Marketing & Management Research (TAJ MMR), 8(5), 36. https://doi.org/10.5958/2279-0667. 2019.00019.1
Tan, Y., &Floros, C. (2013). Risk, capital and efficiency in Chinese banking. Journal of International Financial Markets, Institutions and Money, 26(1), 378–393. https://doi.org/10.1016/J.INTFIN.2013.07.009
Weber, O. (2017). Corporate sustain ability and financial performance of Chinese banks. Sustainability Accounting, Management and Policy Journal, 8(3), 358–385. https://doi.org/10.1108/SAMPJ-09-2016-0066/FULL/PDF
Zedan, K. A. &Daas, G. (2017). Palestinian Banks Analysis Using CAMEL Model . International Journal of Economics and Financial Issues , 7 (1) 351-357 .https://dergipark.org.tr/en/pub/ijefi/issue/32002/353201
