http://www.scribd.

com/doc/27864828/9/Methodology-Adopted Rating The Performance of the Bank through CAMELS Model

PREFACE

We know that final the project is for the development and enhancement of the knowledge in particular field. It can never be possible to make a mark in todays competitive era only with theoretical knowledge when industries are developing at global level, practical knowledge of administration and management of business is very important. Hence, practical study is of great importance to PGDM student. With a view to expand the boundaries of thinking, we have done 4th SEM FINALPROJECT at three banks i.e. AXIS bank, Gandhidham Co-operative Bank and Bank of India. We have made deliberate efforts to collect the required information and fulfill project objectives.

EXECUTIVE SUMMARY In todays scenario, the banking sector is one of the fastest growing sector and a lot of fundsare invested in Banks. Also todays banking system is becoming more complex. So, wethought of evaluating the performance of the banks. There are so many models of evaluating the performance of the banks, but we have chosen the CAMELS Model toevaluate the performance of the banks. We have read a lot of books and found it the bestmodel because it measures the performance of the banks from each parameter i.e. Capital,Assets, Management, Earnings and LiquidityAfter deciding the model, we have chosen three banks from the three different sectors, i.e.AXIS Bank from Private Sector, Gandhidham Co-operative Bank from co-operative banksand Bank of India from the public sector. Then we have collected annual reports of theconsecutive five years i.e. 2004-05 to 2008-09 of all the banks. And we have calculatedratios for all the banks and interpreted them.After that we have given weightage to each parameter of the CAMELSModel. According to their importance and our understandings, we have allocated weightageto the each ratios of the each parameter. From the weighted results of each ratio, we havegiven marks on the bases of the performance of the bank. And after addition of all themarks, we have given the rank 1, 2 and 3 to the banks.As per the whole evaluation, we gave 1st rank to AXIS Bank, 2 nd rank to Bank of India and3 rd rank to Gandhidham Co-operative Bank

CONTENTS Particulars Page No.Chapter 1 INTRODUCTION OF BANKING SECTOR 101.1) The Bank 111.2) The Origin and Use of Banks 111.3) Banking Reform 121.4) BASEL II Accord 14 Chapter 2 INTRODUCTION TO THE BANKS UNDER THE STUDY 182.1) AXIS Bank 192.2) Bank of India 212.3) Gandhidham Co-operative Bank 23 Chapter 3 CAMELS FRAMEWORK 253.1) C - Capital Adequacy 263.2) A - Asset Quality 283.3) M - Management 303.4) E Earning 313.5) L - Liquidity 343.6) S - Sensitivity to Market Risk 36 Chapter 4 LITRATURE REVIEW 39 Chapter 5 OBJECTIVE & METHODOLOGY 435.1) Objective of the Study 435.2) Methodology Adopted 455.3) Limitations 47 Chapter 6 DATA INTERPRETATION AND ANALYSIS 486.1) Data Interpretation 496.2) Analysis 82 Chapter 7 CONCLUSION, SUGGESTIONS ANDRECOMMENDATION 897.1) Conclusion 917.2) Suggestions and Recommendation 92 BIBLIOGRAPHY 93 ANNEXURE