Awareness and Perception of CAMEL Rating Across Banks: Some Survey Evidence

CAMEL rating is used by most banks across the world as a performance evaluation technique. It undertakes all the important criteria, i.e., Capital, Assets, Management, Earnings and Liquidity (CAMEL), for the evaluation of any bank. There is a need for bank employees to have sufficient knowledge of the rating system, in order to guide the banking growth rate in the positive direction. Lack of knowledge among employees regarding banking performance indicators affects banks negatively as these are the basis for any banking action. The objective of this paper is to find out the awareness level, as well as the perception among bank employees about CAMEL rating, and the efforts made by them for improving the ratings of their banks. The results show that there is, comparatively, a higher degree of lack of awareness among executives of private sector banks, and hence, they do not perceive it positively. Foreign banks enjoy a high degree of awareness and positive perception among their employees.