A Comparative Study on Financial Performance of Selected Public Sector Banks in India Using CAMEL Indicators

The financial health of public sector banks plays a critical role in the stability of India’s banking sector and its broader economy. This study evaluates the financial performance of five leading public sector banks—State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BOB), Canara Bank, and Indian Overseas Bank (IOB)—for the period 2016 to 2025 using the CAMELS framework. The components analyzed include Capital Adequacy, Asset Quality, Management Efficiency, Earnings, and Liquidity. Secondary data collected from annual reports and RBI publications is subjected to descriptive analysis, graphical representation, and inferential statistics through One-Way ANOVA. Key financial indicators such as Capital Adequacy Ratio (CAR), Net NPA to Total Assets, Return on Assets (ROA), Return on Net Worth (RONW), Credit-Deposit Ratio, and Operating and Net Profit Margins are used to assess performance. The results reveal that Bank of Baroda and Canara Bank have demonstrated relatively strong and stable financial performance, while Indian Overseas Bank and Punjab National Bank have faced considerable challenges, particularly in terms of asset quality and earnings. ANOVA findings indicate statistically significant differences across banks for most indicators, except CAR and Net Profit Margin. The study concludes with strategic recommendations to improve asset quality, adopt technological innovation, and strengthen managerial efficiency, aiming to enhance the overall performance of public sector banks in India.