In the area of corporate finance, the impact of liabilities on investment decisions by companies has drawn keen attention. In other words, given simple assumptions, it is noted that there is no connection between fund procurement and the debt ratio. Regarding the negative effects of liabilities on corporate management, however, it is noted that liabilities can influence corporate behaviors through the following three channels. Firstly, as increased liabilities raise bankruptcy risks, corporate managers who fret over the possibility of shareholders holding them accountable tend to move to curb borrowings and/or reduce investments, potentially raising the prospect of underinvestment. Secondly, as larger interest payment burdens resulting from higher debts reduce funds in hand, so debt has a negative impact on the investment activities of companies with promising investment opportunities. Thirdly, managers of companies with declining equity ratios have an incentive to make investments with a high expected rate of return even at the risk of sacrificing creditors. Therefore, as liabilities increase, creditors become increasingly reluctant to provide more funds, a development that can lead to underinvestment. This Paper analyses the Impact of Debt Equity Ratio on Corporate Management of the Banks.