Performance Of Capital And Equitas Sfbs – A Study

Abstract

The banking industry is a pillar of economic development, with Small Finance Banks (SFBs) playing a pivotal role in deepening the depth of financial inclusion in the under banked segments of marginal farmers, small businesses, and the unorganized sector. In this research, the financial performance of Equitas Small Finance Bank and Capital Small Finance Bank from 2017 to 2024 is examined using the CAMELS framework, a popular set of parameters adopted to evaluate critical banking parameters: Capital Adequacy, Asset Quality, Management Efficiency, Earning Quality, Liquidity, and Sensitivity. The study utilizes secondary data from the financial reports and annual reports of the two banks and statistical analysis using SPSS software. The study discovers that Equitas SFB exhibits better capital adequacy and profitability in the form of better net interest margins, return on assets, and revenue diversification. Capital SFB, however, has better asset quality and liquidity management, as reflected in its lower Non-Performing Assets (NPAs) and cost efficiencies. The study also discovers variations in lending policies, risk exposure and operational efficiency between the two banks. These differences indicate divergent strategies in corporate direction and regulatory compliance. Policymakers, investors and financial regulators looking to evaluate the stability and expansion potential of SFBs will find the insight to be very useful.