Operational efficiency and optimum utilisation of the resources available in different sectors play a vital role in the developmental of an economy. Banking sector is considered as the pivotal sector for providing finance and liquidity services to the other sectors, facilitating them flourish and expand through speedy Capital Formation, Innovation, Monetisation along with formulating Monetary Policy etc and thus leading the economy towards progress and development. Therefore, analysing the banking sector through its performance evaluation has become a necessity for assessing the soundness of the financial system and the economy as well. For evaluating the financial performance of banking sector, CAMELS model or rating is used across the world. CAMELS model was first introduced by United States to ascertain overall performance of a bank with the name CAMEL. Later on, the letter S was added as sixth parameter making it as CAMELS model. CAMELS model basically measures the performance of banks with the applications of parameters like Capital Adequacy, Assets Quality, Management Efficiency, Earning Quality, Liquidity and sensitivity to market risk. This paper is just an attempt has to explain the concept of CAMELS model for performance evaluation of banks in India.

KEYWORDS: CAMELS, NVUA, Performance Evaluation of Banks in India.