Is Indian Banking Industry in Great Trouble?-A Credit Risk Analysis of selected Indian Banks using Camel Model

Abstract

The banking sector is one of the fastest growing sector and Banks play a crucial and significant role in the economy. In today's scenario Banks are very much exposed to credit risks. In order to attain sustainable growth Banks have to mitigate the credit risk. The percentage of Non Performing Assets have been increasing at an alarming rate in recent years. Banks have to devise out prudent credit risk management practices in order to control Non Performing Assets Formation. The present study focuses on credit risk analysis of three leading Banks namely State bank of India, ICICI and Canara Bank using CAMEL parameters for a study period of 2005–06 to 2014–15. A comparative analysis was carried out to identify the financial position of the Banks. Banks are ranked based on their frequency of first position obtained by them during the study period. The results from the analysis indicate that ICICI stands first in all the CAMEL parameters followed by Canara Bank and SBI.