Abstract
This study investigates the importance of economic value added for the shareholders’ value maximization. Economic value added (EVA) is a value based performance measurement tool that helps to settle down the management decision regarding creation of shareholders value. Very few literatures are found regarding creation of shareholder values in banks. Sample of 40 Indian commercial listed Banks and panel data are used for the period of 2001 to 2015, the empirical findings for Public limited banks and overall Indian banks revealed that there is a positive and significant relationship between shareholder’s value maximization and EVA but in case of Private limited banks, DPS was found to have significant relationship with shareholder value. The Higher the value of EVA, higher shareholders value .The finding shows significant support for EVA and DPS, but it was found that EVA is not efficiently used for Analysis and decision making regarding creation of value. Thus it is suggested to focus on criteria of EVA for analyzing shareholder’s value of banks.
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