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Mostly loads are inductive in nature in content of distribution side for any power system. Due to which system faces high power losses, voltage drop and reduction in system power factor. Capacitor placement is a common method to improve these factors. To maximize the reduction of inductive load impact, optimal capacitor placement (OCP) is necessary with the objective function of system cost minimization for voltage profile enhancement, power factor improvement and power losses minimization. As OCP is a non-linear problem with equality and inequality limitations, so the stated objective depends upon the placement and sizes of the capacitor banks. Electrical transient analyzer program (ETAP) software is used for the evaluation and modeling the power systems and genetic algorithm (GA) is used as an optimization technique for the minimization of the objective function. In this paper,to show the effectiveness of the technique IEEE 21 bus system is modeled and evaluated in terms of objective minimization and maximum cost saving of the power system.