Integrating CAMELS, RGEC, and Z-Score for Financial Soundness Assessment of Islamic Rural Banks

Abstract

As Islamic rural banks expand their role in inclusive finance and community-based development, ensuring their financial resilience is critical for long-term sustainability. This study evaluates the financial soundness of PT BPRS Patriot Bekasi using an integrated assessment model combining CAMELS, RGEC, and Altman Z-Score frameworks. Covering the period from 2020 to 2024, this research employs a descriptive-quantitative method using secondary financial data. The CAMELS analysis indicates strong capital adequacy, high asset quality, sound governance, and stable profitability, though liquidity emerges as a critical area needing improvement. The RGEC assessment supports these findings, highlighting low financing risk, high Good Corporate Governance (GCG) performance, and strong capital strength, despite challenges in margin efficiency and liquidity pressure. Altman Z-Score results reinforce the bank’s robust financial standing, with all scores well above the bankruptcy threshold, reflecting a solid equity position and consistent earnings. Overall, PT BPRS Patriot Bekasi is financially sound and resilient, with no signs of distress. However, to ensure long-term viability, the bank must improve liquidity management and enhance operational efficiency. This study contributes to the growing literature on Islamic microfinance institutions by demonstrating the value of a combined evaluative framework, offering practical insights for regulators and decision-makers in strengthening the Islamic banking sector.
Keywords: Islamic Rural Bank, Financial Soundness, CAMELS, RGEC, Altman Z-Score