Performance of Small Finance Banks

Abstract

The Indian economy’s growth depends heavily on the banking sector. In recent years, the banking business has undergone numerous changes. The RBI launched small finance banks as a banking initiative to encourage financial inclusion in India. Small finance banks offer services to financially excluded populations like farmers, labourers’ low-income people, etc. This study is related to the period of six years from 2016-17 to 2021-22. The study uses descriptive statistics and the CAMEL model for the evaluation of financial performance. Descriptive statistics are analysed with the help of standard deviation and ANOVA. The CAMEL model analysis assists in determining how efficiently banks have performed in terms of each of the significant ratios including: (i) Capital Adequacy, (ii) Assets Quality, (iii) Management Effectiveness, (iv) Earning Quality, and (v) Liquidity Ratios. Based on the ANOVA the study concludes that the results of the selected banks have similar financial performance.