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Macroeconomic features of a country are being resolute by the banking system. Any type of banking unpredictability and uncertainty could influence the monetary policy. Banking factors could determine the huge problems of banks risks and critical activities. Moreover, indicators could detect the troubles of the banking system that alert the banking regulatory authorities to take appropriate decisions to overcome the difficulties. This specific research is used PLS-SEM to assess the impact of CAMEL criterion on macroeconomic variables. PLS-SEM evaluate and scrutinize the correlation among the constructs of selected banks viz., Bank Muscat, Oman Arab bank, Bank Dhofar, Ahli Bank and Bank Sahar’s’ previous 5 years financial statements starting from 2019 with the help of formative measurement scale to be free of mistakes. The first hypothesis in the study rejected the Null hypothesis by accepting the alternative hypothesis established that the banks’ capital adequacy proved bank soundness. The second hypothesis in the study rejected the Null hypothesis by accepting the alternative hypothesis established that the banks’ asset quality proved bank soundness. Third hypothesis rejected the null hypothesis creating a strong relationship between the management and bank soundness. Fourth hypothesis rejected the null hypothesis creating a strong relationship between the earnings and bank soundness. The fifth hypothesis in the study fails to reject the Null hypothesis by accepting the null hypothesis established that the banks’ liquidity has not part of bank soundness.

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Does the CAMEL Rating System Evaluate Bank Dynamics Using PLS-SEM?

  • 章节

  • 发表日期：

    2026年

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  • Krishna Murthy Meesaala,
  • Varalakshmi Subramani,
  • Ravi Vinod Kumar Sharma,
  • Sameena Begum,
  • Yasmeen Sultana,
  • Latifa Saud Al-Habsi

摘要

Macroeconomic features of a country are being resolute by the banking system. Any type of banking unpredictability and uncertainty could influence the monetary policy. Banking factors could determine the huge problems of banks risks and critical activities. Moreover, indicators could detect the troubles of the banking system that alert the banking regulatory authorities to take appropriate decisions to overcome the difficulties. This specific research is used PLS-SEM to assess the impact of CAMEL criterion on macroeconomic variables. PLS-SEM evaluate and scrutinize the correlation among the constructs of selected banks viz., Bank Muscat, Oman Arab bank, Bank Dhofar, Ahli Bank and Bank Sahar’s’ previous 5 years financial statements starting from 2019 with the help of formative measurement scale to be free of mistakes. The first hypothesis in the study rejected the Null hypothesis by accepting the alternative hypothesis established that the banks’ capital adequacy proved bank soundness. The second hypothesis in the study rejected the Null hypothesis by accepting the alternative hypothesis established that the banks’ asset quality proved bank soundness. Third hypothesis rejected the null hypothesis creating a strong relationship between the management and bank soundness. Fourth hypothesis rejected the null hypothesis creating a strong relationship between the earnings and bank soundness. The fifth hypothesis in the study fails to reject the Null hypothesis by accepting the null hypothesis established that the banks’ liquidity has not part of bank soundness.