Banking Exam Question - What is CAMELS Rating in Banks & Financial Institution? Explain It's Uses in Nepal?

Introduction - CAMELS Rating 

The Camels rating is a supervisory rating system originally developed in the U.S. to classify a bank's overall condition. It is applied to every bank and credit union in all over the world and also implemented by various banking supervisory regulators.

The acronym “CAMEL” refers to the five components of a bank's condition that are assessed: Capital adequacy, Asset quality, Management, Earnings, and Liquidity. A sixth component, a bank's Sensitivity to market risk.

Ratings are not discharged to the general population but rather just to the best administration to keep a conceivable bank keep running on a foundation which gets a CAMELS rating downsize. Organizations with falling apart circumstances and declining CAMELS appraisals are liable to regularly expanding supervisory examination. Fizzled foundations are in the end settled through a formal determination process intended to ensure retail investors.