Financial Health Prediction Of Indian Private Sector Banks By Using Altman Z- Score

Abstract

In the Indian banking industry, maintaining profitability is essential for sustainability, while avoiding bankruptcy is critical for financial stability. Effective risk management, strong governance, regulatory compliance, and technological innovation are key to balancing both. This study is aiming to identify the relationship among the profitability matrix of banking sector to evaluate the bankruptcy performance by using Z- score model, for this purpose top 5 private sector banks are taken as sample over the period of 5 years from 2020-21 to 2024-25. Statistical tools like descriptive statistics, correlation matrix and t- test is applied to justify the objectives. It found that there is a stable and robust financial health of five major Indian banks like HDFC, ICICI, KOTAK, AXIS, and IDBI over the period of 5 years from 2020–21 to 2024–25 and all the factors are also positively responsible for financial stability of the banking sectors. Some factors are not explored in this study to evaluate the bankruptcy of banking sectors. Sample sizes and longitudinal research can be considered to extend the future research.