Determinants of Profitability of Public Sector Banks in India: A Study

Capital is one of the factors which invigorate the economic
development of a nation. Capital is the consequence of investment.
Higher the investment, higher is the growth of economy. Today,
most of the Indian banks can boast of moving progressively towards
international benchmarks in terms of accounting standards,
transparency, profitability and compliance with other important
international norms. It is also to the credit of these banks, and the
regulatory and supervisory climate that the Indian financial system
by the large proved immune to the spate of recent contagions.
As a result of reforms, attempts are now visible to right size of the
operations, tone up the functional skills and build up a cushion
against possible shocks from within and overseas. In this paper the
enumerator has been using secondary data includes 10 years period
i.e., from 2014 to 2023 among 12 Public Sector Banks in India. For
analysis of the secondary data, using Regression analysis by using
both independent and dependent variables. The main theme of this
paper is to identify the various determinants on profitability of the
Public Sector Banks by using various variables in India. The present
project finding that Current Asset ratio is a critical factor across
all models, positively affecting Net Interest Margin and Return on
Equity but negatively impacting Return on Investment and having
a positive but less significant effect on Return on Assets. In case of
operational efficiency have calculated on the basis Metrics like profit
per employee are crucial for improving ROE. Another finding that-
inflation dimensions- It generally has a negative impact across all
models, particularly significant in Net Interest Margin and Return on
Investment