Nowadays the banking sector wants innovation and creativity from its employees so that they can remain competitive by introducing new products and services for its customers. Considering this emerging challenge and following the literary gap, we aim at investing the mediating role of psychological capital between authentic leadership, innovation, and creativity. The data for this study was collected from 276 employees through google forms and results were generated using SPSS. The results revealed a positive impact of authentic leadership on creativity and innovation. Further, psychological capital was found to perform the role of mediator. Implications and limitations of the study are also discussed.