The traditional theory of firm, assumes that firms aim to maximize profit. Although the decision maker in firms may have other aims as well-e.g. pleasant working conditions. Under many circumstances it is legitimate to assume that the overriding aim is the maximization of profit. This paper seeks to profitability of Indian banks on the basis of ratio analysis. In this paper an effort has been made to find out the asset quality of the various banking sectors in relation to their Gross profit and Net profit during the period. Since, the net profit is an important parameter for measuring the profitability of banks that is why it has been used.

Keywords: Profitability, Net Profit, Gross Profit, Ratio Analysis, Profit Maximization.