Financial Performance of Public Sector Banks in India – A Study with Reference to Select Financial Variables
Banking Sector in India is considered an important component of the economy in any country. It is also considered as backbone of the growing economy and the growth of nations depend on the strength of its financial institutions. Banking industry’s role is very vital in this regard. Economies of the nations are said to prosper due to its banking sector with a major contribution from Public Sector. Therefore financial performances of banks play a significant role in this regard. For measuring the financial performance of banks, selected models and measures are developed. In this paper, three banks from public sector are considered for the study and the financial performance is measured using Capital adequacy ratio, which is a measure of available capital of any banking institution to its risk weighted assets; liquidity performance, which shows its ability to utilize readily available cash to meet all regular expenses and help in effective routine functioning; and Non-Performing Assets (NPAs), which are those advances which are unpaid with interest for 90 days. Data for this study has been analyzed for a period of five years.