ASSESSING THE PERFORMANCE OF PAYMENT BANKS IN INDIA USING CAMEL MODEL

The establishment of payment banks in India was aimed at expanding access to formal financial services through digital and low-cost delivery mechanisms.Given their unique operational framework and regulatory constraints, evaluating their financial performance requires a comprehensive and systematic approach.This study analyses the performance of selected Indian payment banks by applying the CAMEL model, which captures key dimensions of institutional strength, namely capital adequacy, asset quality, management efficiency, earnings quality and liquidity.Financial ratios were computed and aggregated to generate comparative CAMEL scores across banks.CAMEL indices is used to quantify institutional strengths and weaknesses across the parameters.The study offers evidence-based insights for regulators, practitioners, and policymakers to strengthen the sustainability of payment banks and contributes to the emerging body of research on specialized banking models in developing economies.