Performance Analysis of Indian Banks Through CAMELS Model: A Conceptual Outlook
R Sateesh1*, P Mohan Reddy2.
1*Research Scholar, Department of Commerce, SV University, Tirupati, sathi.sathish77@gmail.com
2 Professor of Commerce, Department of Commerce, S V University, Tirupati.
Abstract
The Indian banking sector has undergone significant structural transitions over the past two decades, driven by regulatory reforms, digital transformation, and evolving risk environments. While the CAMELS framework—comprising Capital Adequacy, Asset Quality, Management Efficiency, Earnings, Liquidity, and Sensitivity to Market Risk—remains the most widely adopted model for evaluating banking performance, existing Indian studies predominantly rely on traditional ratio-based assessments, overlooking contemporary determinants such as digitalization, cybersecurity, and technology-enabled governance. This scoping review synthesizes 52 peer-reviewed articles published between 2000 and 2025 to map the methodological evolution, thematic patterns, and conceptual gaps in CAMELS-based evaluations of Indian banks. Findings reveal a strong concentration on Asset Quality and Earnings, reflecting India’s chronic NPA challenges, while Sensitivity and Liquidity dimensions remain underexplored. Comparative insights consistently show private banks outperforming public sector banks in management efficiency, earnings stability, and technological preparedness. However, the review identifies a critical gap in integrating digital transformation indicators into performance assessment, despite the increasing relevance of fintech adoption, cyber-risk exposure, and real-time governance. To address this gap, the study proposes an enhanced CAMELS-DT framework, extending traditional CAMELS with two additional dimensions: Digital Capability (D) and Technology-Enabled Risk Governance (T). This conceptual extension responds to India’s rapidly digitalizing banking ecosystem and aligns performance evaluation with contemporary supervisory needs. The study offers a forward-looking foundation for empirical testing, regulatory application, and scholarly advancement, positioning CAMELS-DT as a comprehensive, resilience-oriented model for evaluating the performance of Indian banks in a technology-driven era.
Keywords: CAMELS framework, Indian baking sector, Performance evaluation, Digital transformation,
