Essay on Notes On The Banking Sector

804 Words Oct 19th, 2016 4 Pages
The banking sector plays a very important role in the country’s economy, therefore, the banking industry offer up to the national incomes and the global growth. It is imperative to assess, break down and screen the banking performance . Variety of methods was used to analyse the performance of banks and the most popular ways it eh CAMELS rating system, the banking supervision institution based on six factors to assess the registration of financial institutions. CAMELS represents the six rating factors, including capital adequacy, asset quality, management quality, profit and earnings, cash flow (liquidity), the sensitivity to market risk . The system score from 1 (best) to 5 (worst), if the bank overall rating is below 2, indicating that the bank 's operating quality is excellent, if more than 3, banks need to guard the authorities. Bank stock investors can not only according to CAMELS rating scores to directly understand the pros and cons of bank texture, but also in accordance with this framework to carry out specific analysis of commercial banks .

1.CAPITAL ADEQUACY: Table 1 shows the Tier-I Capital, Tier-II Capital, and Capital Adequacy Ratio of public and private/foreign banks. It was found that private/foreign banks had higher Tier-I Capital than public sector banks, while public sector banks had higher Tier-II Capital than private/foreign banks. It was also found that private/foreign banks had higher Capital Adequacy Ratio than public sector banks. In particular,…

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