The Full Form of CAMELS is Capital Adequacy, Quality of Assets, Quality of Management, Earnings, Liquidity, and Sensitivity.
CAMELS rating system is an internationally recognized supervisory tool which was developed in the US to measure the bank’s or other financial institution’s level of risk with the help of its financial statements. The parameters used for judgement comprises of capital adequacy, asset quality, management, earnings, liquidity and sensitivity.
The CAMELS rating system is adopted as a tool for determining the strengths and weaknesses of the various financial institutions and rating their performance in the economy by the supervisory authorities of a country.
CAMELS
means
Capital Adequacy, Quality of Assets, Quality of Management, Earnings, Liquidity, and Sensitivity
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