The purpose of the study is to analyse the impact of Basel III implementation on profitability of banks. One of the basic requirements of Basel III is increased capital adequacy ratios to be maintained by the banks. The study has found that the banks are showing declining trend in their profitability ratios which implies Basel III implementation has hit the Indian banks hard. However, the effective and successful implementation of Basel III norms are going to make Indian Banks stronger, stable and sound. It was also found that Indian banks are better placed as they are able to maintain high capital adequacy ratios and are having enhanced proportion of high quality common equity capital.