RELATIVE FINANCIAL SOUNDNESS OF INDIAN COMMERCIAL BANKS USING ALTMAN’S Z-SCORE AND BANKOMETER MODEL
Received: 30.04.2021; Revised: 29.06.2021, Accepted: 28.07.2021, Published Online: 13.08.2021
Prof. Parmil Kumar
Associate Professor Commerce, Govt. PG College Ambala Cantt & Research Scholar, Dept. of Management Studies, M.M.U. Sadopur, Ambala, Haryana (India). E-mail: firstname.lastname@example.org
Prof. (Dr.) Anupam Sharma
Associate Professor, Dept. of Management Studies, M.M.U. Sadopur, Ambala, Haryana
Present research aims to assess and compare the financial soundness of the public sector banks and private sector banks using Altman’s Z-score and Bankmeter’s S-score in India from 2014-15 to 2018-19. The present study is based on the financial data of 39 commercial banks comprising 20 public sector banks and 19 private sector banks, uses the parametric t-test to analyze and compare the financial soundness of public sector banks and private sector banks. Though the bank-specific data and quantitative data do have their limitations in depicting the real picture of the financial soundness of a banking institution, the finding of the present study provides some insights into the financial soundness of commercial banks in emerging markets after the post-crisis of 2008, after-effects of which have been still troubling the global financial system. The study contributes to the existing literature on the likelihood of financial distress in commercial banks especially the post –demonetization in India when the economy has been in recession in the last some years and the commercial banks have been facing the challenge of mounting non-performing assets.
Keywords: Public Sector Banks, Private Sector Banks, Financial Distress, Financial Soundness, Altman’s Z-score, Bankometer-Model.