A Comparative Study on Financial Stability of Selected Public Sector Banks through CAMEL Model

The present study examines the financial stability of selected public sector banks in India using the CAMEL model framework. The study focuses on three major public sector banks, namely State Bank of India, Bank of Baroda, and Punjab National Bank, over a period of five years from 2020-21 to 2024-25. The analysis is based on key CAMEL indicators including Capital Adequacy Ratio, Gross NPA to Advances, Interest Income per Employee, Return on Assets, and Liquidity Assets to Total Assets Ratio. The study employs ratio analysis and one-way ANOVA to evaluate performance and identify significant differences among the selected banks. The findings reveal that Bank of Baroda maintained the highest capital adequacy ratio, indicating a strong capital position, while State Bank of India demonstrated superior asset quality with the lowest Gross NPA ratio. In terms of management efficiency, State Bank of India recorded the highest interest income per employee, whereas Bank of Baroda and State Bank of India showed better profitability measured through return on assets. The liquidity position of all three banks remained stable during the study period. ANOVA results indicate significant differences in capital adequacy and asset quality, whereas management efficiency, profitability, and liquidity showed no significant variation. Overall, the study concludes that the selected public sector banks maintained sound financial stability, with variations observed across different CAMEL parameters.