Ranking of Selected Commercial Banks in India based on CAMELS Model

Abstract

This study ranks ten leading Indian commercial banks — five public sector and five private sector — across a ten-year horizon (FY2015–16 to FY2024–25) using the CAMELS (Capital Adequacy, Asset Quality, Management Quality, Earnings, Liquidity, and Sensitivity to Market Risk) framework. Employing Min-Max normalization across eleven financial ratios drawn from Reserve Bank of India publications, the study converts raw ratio values into comparable scores on a 0–1 scale, thereby preserving relative differences and overcoming the magnitude-blindness of traditional ordinal ranking. The sample encompasses HDFC Bank, Kotak Mahindra Bank, IndusInd Bank, Axis Bank, and ICICI Bank (private sector) and State Bank of India, Bank of Baroda, Union Bank of India, Canara Bank, and Punjab National Bank (public sector), selected on the basis of total assets as of FY2024–25. The CAMELS analysis reveals a distinct ownership-based performance divide: private sector banks occupy all top five ranks while public sector banks occupy positions six through ten. HDFC Bank emerges as the overall leader with a composite normalized score of 0.6531, driven by superior asset quality and earnings consistency. Kotak Mahindra Bank leads in capital adequacy, whereas public sector banks demonstrate comparative strength in liquidity. The findings confirm that effective credit risk management, operational efficiency, and strategic positioning are stronger determinants of bank performance than ownership structure alone. This study contributes a methodologically rigorous, longitudinal CAMELS ranking framework applicable to emerging market banking systems, offering actionable insights for regulators, investors, and bank management.