© 2017 EMO (Turkish Chamber of Electrical Enginners).Generated Power in power stations are passed through large and complex Transmission and Distribution networks' equipment such as transformers, overhead lines, cables, etc. and reaches at the end users. Due to inductive loads in the power system the unit of electric energy generated by power station does not match with the units distributed to the consumers. Some percentage of the units is lost in the network. The largest part of this loss is 'Distribution network losses'. Capacitor placement is the most practical method to reduce Losses. It also improves power factor and voltage profiles. Important point in optimal capacitor installation is finding sizes, location and the number of capacitors that have to be placed on the network. This paper presents an approach for optimal placement of capacitor banks in a radial network for the purpose of economic minimization of loss and enhancement of voltage with Genetic Algorithm.