Financial distress and sustainability growth of Indian banks listed in BSE 30

Banks are considered as the backbone of the economic financial system of a nation. Any failure in the financial performance or financial breakdown will affect the whole banking sectors as well as other dependent sectors heavily. Any issues related to financial distress or the financial problem will make the bank in a shortage of capital. The Altman Z- Score helps in testing the credit strength of the banking sector in the Indian economy as the Altman Z-Score is based on five financial ratios to assess the profitability, leverage, liquidity, solvency, and activity. So in this paper, this model is used to study the level of financial distress of banking sectors. Further, Higgins model suggests various methods to measure the performance of firms like financial leverage (debt ratio and equity ratio), liquidity (current ratio), and assets efficiency (total asset turnover). However, the sustainable growth rate is a method that identifies the performances of firms that they supposed to achieve. This helps to compare the actual growth rate with sustainable growth rate. In this paper, an attempt has been made to critically analyze the financial and operational policies that will help to maintain a healthy growth. For examining the sustainable growth rate of Indian banking sector, the banks listed in BSE 30 have been selected as these banks are the representative of the banking sector. The analysis will reveal the effect of sustainable growth rate on profit margin, debt-equity ratio, return on equity, dividend payout ratio and return on total assets to sales.