The present supervisory system in banking sector is a substantial improvement over the earlier system in terms of frequency, coverage and focus as also the tools employed. Nearly one-half of the Basle Core Principles for Effective Banking Supervision has already been adhered to and the remaining is at a stage of implementation. Two Supervisory Rating Models, based on CAMELS and CACS factors for rating of the Indian Commercial Banks and Foreign Banks operating in India respectively, have been worked out on the lines recommended by the Padmanabhan Working Group (1995). These ratings would enable the Reserve Bank to identify the banks whose condition warrants special supervisory attention. This paper studies the performance of SBI and ICICI through CAMEL Model for the period 2000-01 to 2004-05. It is found that SBI has an edge over its counterpart ICICI in terms of Capital Adequacy. However, the vice versa is true regarding assets quality, earning quality and management quality. The liquidity position of both the banks is sound and does not differ significantly.
A
sound financial system is indispensable for a healthy and
vibrant economy. The banking sector constitutes a predominant
component of the financial services industry and the performance
of any economy, to a large extent, is dependent on the performance
of the banks. Banking institutions in our country have been
assigned a significant role in financing the process of planned
economic growth. In 1969, 14 banks were nationalized with
the objective of extending credit facilities to all segments
of the economy and also to mitigate seasonal imbalances in
their availability. Since nationalization, the banking system
in India has witnessed structural and dimensional changes.
A number of steps were taken in close succession, enabling
the nationalized banks to play an active role in economic
development. The second step in the process of nationalizing
the banks was taken in 1980, when six other major banks were
nationalized. Directed interest rates on deposits and lending,
exchange controls, directed credit became the hallmark of
this tightly regulated new structure. |
