It maximizes welfare by ensuring that the greatest quantity of credit is supplied at the lowest price. After almost two years of hard work and consultation with banks, our framework for assessing the financial strength of banks, the CAMEL Rating has been refined and will be made public at the beginning of next month.
For those who may not know it, the CAMEL rating framework is made up of five components – Capital, Asset quality, Management, Earnings and Liquidity – in respect of which each financial institution is assessed. We are working on devising a similar framework for non-bank deposit taking institutions (NBDTIs) to provide the public with vital information on the financial standing of NBDTIs.