Effect of Leverage on Profitability - A Study of Selected Banks of India

Banks are the most significant players in the Indian financial market. They are the biggest purveyors of credit, and they also attract most of the savings from the population. Banking has been a right hand of any economy. The growth of any economy depends on the main industries of the country. But the growth needs financial aid from either public or from government. So, RBI, the regulatory body has introduced many schemes for the development of different industries. RBI comply all the scheduled banks to provide loans with the priority sectors for growth of different industries. This project is based on Leverage. So the term leverage ¿may be defined as the percent of change in one variable by the percent of change in some other variable. In the field of finance management, the term leverage is used to describe the firm¿s ability to use fixed cost assets or funds; the former is popularly known as operating leverage and the latter is known as financial leverage and multiple of both is known as combine leverage.