Camel study of Indian Banks: A Case Study of Bank of Baroda and HDFC Bank

Abstract

Purpose: The purpose of this research is to evaluate and compare the financial performance in the first quarter of two major Indian banks, Bank of Baroda (a public sector bank) and HDFC Bank Ltd (a private sector bank), using the CAMEL model framework. The CAMEL model examines five key aspects of a bank's financial health: Capital Adequacy, Asset Quality, Management Quality, Earnings Quality, and Liquidity. Design/Methodology/Approach: Historical data spanning five financial years (2019-2024) was gathered from annual reports, Reserve Bank of India (RBI) publications, and similar sources. Findings: Findings reveal that HDFC Bank outperformed Bank of Baroda across various CAMEL ratio components, including profitability, asset quality, and operational efficiency. Despite this, Bank of Baroda has bolstered its capital position and demonstrated prudent management of non-performing assets (NPAs), indicating progress in public sector banking reforms. Conclusion: This study highlights the divergence in performance between public and private sector banks in India, underscoring the importance of robust financial metrics for the resilience of the banking industry. Originality/Value: Recommendations are provided for banks and policymakers, along with suggestions for future research based on identified gaps in the existing literature.