Adoption of Digital Financial Services and the Performance of Commercial Banks in India – A Camel Rating System Approach

This paper is dealing with the adoption of digital financial services on the performance of commercial banks in India. The study used camel rating system to measure pre and post adoption performance of commercial banks. The reports says that Indian banks are widely adopted digital financial services during the year 2012-13. Hence, 2004-05 to 2011-12 considered as pre adoption period and 2012-13 to 2019-20 considered as post adoption period for the data analysis. 44 banks were selected for the study based on the data availability. 15 camel ratios were identified and paired t-test used for analysis. The study found that most of the CAMEL (capital adequacy, assets, management capability, earnings, liquidity) variables are found significant to improve the financial performance of banks. The coefficient of digital financial services variables is found to be significant. This indicates that facilities of digital banking could enhance the financial performance of banks.