A Pragmatic Analysis of Financial Health in Commercial Banks UsingCAMEL Approach

Abstract

Banks are in metamorphosis stage where technology induction, LPG policy are the key
indicators for the transition. This widened the horizons of banking product innovation aiming at value
enhancement and redefining the way banking is transacted. In the changing environs - Safety, Security and
Soundness become the prime concerns to determine the financial health. The present study is proposed to
understand the impact of key performance ratios on the financial health of the commercial banks – a case of
Andhra Bank is taken. The CAMELapproach is used for evaluating the financial health of the bank.
Statistical techniques like Ranking and One-Way ANOVA are applied. The analysis can be concluded that
from initial year of study the bank had all the ratios were above the standard norms showing financial health
of the bank which could sustain the bank during the waves of financial crisis.