PERFORMANCE EVALUATION OF BANKS THROUGH CRAMEL MODEL PREPARED BY: POOJA SINGH (1005) HELI MODI (1008)

INTRODUCTION
Banking in India originated in the last decades of the 18th

century. After India's independence in 1947, the Reserve Bank was nationalized. Banking sector in India has always been one of the most preferred avenues of employment. Banks have diversified their activities and are getting into new products and services. Public Sector Banks (PSBs), in India account for more than 78 per cent of the total banking industry assets. In Indian Banking Industry some of the Private Sector Banks operating

CRAMEL MODEL
An established method of evaluating the performance of banks

of all types. All the parameters and sub-parameters in this method focus on compliance to prescribed regulations.
CRAMEL stands for: C = Capital Adequacy R = Resources deployed A = Asset Quality M = Management Quality E = Earning Quality L = Liquidity

LITERATURE REVIEW
Veni (2004) studied the capital adequacy

requirement of banks and the measures adopted by them to strengthen their capital ratios.
Bodla and Verma (2006), made an attempt

to examine and compare the performance of two largest banks of India - SBI, a public sector bank; and ICICI a private sector bank

 Satish and Bharathi (2006) revealed that the Indian banking

system has come a long way since independence going through different phases of nationalization and liberalization and is now preparing itself for the very critical phase, i.e., Globalization.
Given this background and the development of the banking

sector, it is interesting to see how the banks have performed in financial year 2005-06. The researchers undertook a study of the banking sector based on their annual results for the year 2005-06 using CRAMEL model.

Sisodiya et al. (2008), in their article titled,

Indian Banking Industry: Sustaining the Growth Momentum revealed that the banking sector in India has once again come out with another fiscal of robust performances.

Sisodiya and Pemmaraju (2009), in their

article said that the Indian banking has shown remarkable resilience even amidst the worst ever financial catastrophe that hit the global economy about a year ago and caused the collapse of several financial giants.

RESEARCH METHODOLOGY
Problem statement To analyze the efficiency and competitiveness of the banks on the basis of CRAMEL model. Objective of the study To measure the performance of the various banks by using CRAMEL model of evaluation. To rank the various banks on the basis of their respective performances. Differentiating between various private and public sector banks on the basis of ratings

Method of data collection The secondary data : Annual reports Internet journals magazines, etc. Research design Descriptive research Significance of the study It will be helpful for the reader to know the specific details of the model which in turn lead to identify the strengths and weaknesses of the banks. By having a standardized CRAMELS model for all banks, it becomes easy to compare different banks. Customer can easily evaluate the credit risk involved in public and private sector banks on the basis of ratings.