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Banks
World Journal of Social Sciences
Vol. 3. No. 3. May 2013 Issue. Pp. 71 – 88

Performance Appraisal of Indian Public Sector Banks
Parvesh Kumar Aspal * and Naresh Malhotra**
The strength of economy of any country basically hinges on the strength and efficiency of financial system, which, in turn, depends upon a sound banking system. The regulators have recommended bank’s supervision through CAMEL rating model to assess the performance of banks, which is better than the earlier systems.
The prime objective of CAMEL model of rating banking institutions is to make their comparative performance analysis. It is basically a ratio based model for evaluating the performance of banks. The basic purpose of the present study is to evaluate the financial performance of Indian public sector banks excluding State Bank
Group for the period of 2007-11. The study found that Bank of
Baroda was at the first position with overall composite ranking average of 6.05 due to its better performance in the areas of liquidity and asset quality, closely followed by Andhra Bank with average of 6.15 because of its strength in the spheres of management efficiency, capital adequacy and asset quality. United
Bank of India holds the bottom most rank with average of 14.60 due to management inefficiency, poor assets and earning quality.
The study recommends that United Bank of India has to improve its management efficiency, assets and earning quality. Similarly
Bank of Maharashtra should improve its liquidity position and management efficiency.

JEL Classification: G21, G24 and G28

1. Introduction
A sound financial system is indispensable for the growth of a healthy and vibrant economy. The banking sector, being a crucial constituent of financial system is the lifeline of any modern economy. It is one of the important financial pillars of the financial system which plays a vital role in the success /failure on an economy. Banks are one of the oldest financial



References: Management, vol. 6, no. 25, pp. 7601-11.

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