* Research Scholar, DOS in Economics and Cooperation, Manasagangothri, University of Mysore, Mysore.
**Assistant Professor, DOS in Economics and Cooperation, Manasagangothri, University of Mysore, Mysore.
Online published on 7 December, 2012.
The paper analyses profitability of Indian banking sector while controlling for wide array of bank specific and macroeconomic determinants. We find Indian banks profitability was not much affected by the global recession by the empirical results we find the credit risk was affected but ROE was not affected. In the parametric t test by bank group wise the natural logarithm of the accounting value of the total assets of bank was the only variable significant in three bank groups, expense management regarding to asset was significant for public and foreign bank, all other variables was not affected by global financial crisis. In ANNOVA test ROA and ROE for whole period was showing only significant at 1% that means global financial crisis was not much affected but in the post crisis period ROA was much more affected that ROE. Further our Banking sector was able to stand before contagious financial crisis because RBI has succeeded to keep the Indian banking system under control. The secrete of success of Indian banks lies in attitude of the people to save 1rupee out of 2rupees and to save 3rupees out of 4rupees. Like western culture Indians do not believe in over spending habit than they earn.
