A Camel Analysis Of Pre And Post-Merger Of Indian Bank
DOI:
https://doi.org/10.66635/8ewqc408Keywords:
Indian banking system, CAMEL model, efficiency, DEA ModelAbstract
ModEconomic liberalization, as a product of globalization since the early 1990s, has resulted in developing a sense of urgency among corporate entities to analyze the impact of restructuring strategies on the performance of the organizations. Incidentally, the Government of India, along with the Reserve Bank of India, has initiated mergers and acquisitions in the Indian banking sector with the anticipation that it would accrue benefits to the banks in terms of economies of scale and also make an attempt to make the Indian banks more competitive and effective in the global sphere. In this study, we analyzed and compared the performance of the Indian bank after its merger with Allahabad Bank. 6 years of data were taken into consideration: 5 years before the merger from 2015-16 to 2019-20, and 5 years after the merger from 2020-21 to 2024-25. From the analysis, the CAMEL model was taken into consideration. All ratios, such as asset quality ratio, management efficiency ratio, earning efficiency ratio, and liquidity ratio, showed improvement after the merger. From the study, the researcher found that some ratios show improvement in the performance of the Indian bank after merger with Allahabad Bank, such as business per employee, profit per employee, CAR ratio, and gross NPA and Net also decline after the merger, which shows significant improvement.
References
1.Agarwala, V., & Agarwala, N. (2019). A critical review of non-performing assets in the Indian banking industry. Rajagiri Management Journal, 13(2), 12–23. https://doi.org/10.1108/ramj-08-2019-0010
2.Akhtar, S., Alam, M., & Ansari, M. S. (2022). Measuring the performance of the Indian banking industry: data envelopment window analysis approach. Benchmarking, 29(9), 2842–2857. https://doi.org/10.1108/BIJ-03-2021-0115
3.Babu, M. R., & Ashok Kumar, M. (2018). Evaluating the nationalization & privatization effect: A case of Indian banking industry. Banks and Bank Systems, 13(1), 11–21. https://doi.org/10.21511/bbs.13(1).2018.02
4.Berger, A. N., & Humphrey, D. B. (1994). Bank Scale Economies, Mergers, Concentration, and Efficiency. The Wharton Financial Institution Centre1, January, 1–26. https://core.ac.uk/download/files/153/6649850.pdf
5.Chen, T. Y., & Yeh, T. L. (1998). A study of efficiency evaluation in Taiwan’s banks. International Journal of Service Industry Management, 9(5), 402–414. https://doi.org/10.1108/09564239810238820
6.E-journal, L. I. (2022). Lokavishkar International E-Journal, ISSN 2277-727X, Vol-11, Issue- 01, Oct-Mar 2022 (Biannual). 2022, 44–47.
7.Hensel, N. D. (2006). Cost-efficiencies, profitability, and strategic behavior: Evidence from Japanese commercial banks. International Journal of Managerial Finance, 2(1), 49–76. https://doi.org/10.1108/17439130610646162
8.Hon, L. Y., Tuck, C. E., & Lin Yu, K. (2011). Efficiency in the Malaysian Banking Industry. Asean Economic Bulletin, 28(1), 16. https://doi.org/10.1355/ae28-1b
9.J, I. (2019). A Study on Mergers and Acquisition of Banks and a Case Study on SBI and its Associates. Conference Proceeding Published in International Journal of Trend in Research and Development, September, 2394–9333. www.ijtrd.com.
10.Jayadev, M., & Sensarma, R. (2007). Mergers in Indian Banking: An Analysis. South Asian Journal of Management;, 14(4), 20–49. http://hdl.handle.net/2299/3465
11.Kanghwa, C. (2010). From operational efficiency to financial efficiency. Asian Journal on Quality, 11(2), 137–145. https://doi.org/10.1108/15982681011075943
12.Kodan, A. S., Mahalan, S., & Bandhu, D. (2010). Operational Efficency of Indian Banking Industry: An Inter Sectoral Analysis. Management and Labour Studies, 35(3), 357–368. https://doi.org/10.1177/0258042X1003500303
13.Kumar, V. P., & Kar, S. (2023). Measuring the efficiency of Indian public and private banks using the two-stage network DEA model. Benchmarking, 30(2), 382–406. https://doi.org/10.1108/BIJ-07-2021-0375
14.Nikhat, F. (2014). Capital adequacy: A financial soundness indicator for banks. Global Journal of Finance and Management, 6(8), 771–776.
15.Oluitan, R. (2014). Bank Efficiency in Africa. The Journal of Developing Areas, 48(2), 205–221. https://doi.org/10.1353/jda.2014.0023
16.Rai, S., Chabot, M., Bertrand, J. L., & Shaikh, I. (2021). Indian banking industry: A new evidence from a profitability perspective. Business: Theory and Practice, 22(2), 349–360. https://doi.org/10.3846/btp.2021.12982
17.Sultan, J., Ali, A., & Saeed, A. (2013). A Comparison of Technical Efficiency of Performance of Different Banks Before and After Merger: A Study of Pakistan Banking Industry. Journal of Economics and Sustainable …, 4(9), 113–127. http://iiste.org/Journals/index.php/JEDS/article/view/6488
18.Tamatam, R., Dutta, P., Dutta, G., & Lessmann, S. (2019). Efficiency analysis of Indian banking industry over the period 2008–2017 using data envelopment analysis. Benchmarking, 26(8), 2417–2442. https://doi.org/10.1108/BIJ-12-2018-0422.
