CAMELS Approach
It is a supervisory rating system originally developed in the US to classify banks overall condition. It is applied to every bank and credit union in the US. This approach came in India in early 1990s . In 1995 Reserve Bank of India set up a working group.
C- Capital Adequacy
A - Asset Quality
M- Management Quality
E- Earnings
L- Liquidity
S- Sensitivity
Statutory Liquidity Ratio (SLR)
It refers amount that the commercial banks require to maintain in the form of gold or government approved securities before providing credit to the customers. The Maximum limit of SLR is 40% and Minimum is 0%. If banks are fail to maintain minimum, Reserve Bank of India impose penalty.
