In India the banking and financial sector reforms were initiated during the last decade of the 20th
century as a part of general economic reforms with a view to improving the soundness of the public sector
banks and other financial institutions. Public sector banks achieved spectacular success during the post
nationalization period but such spectacular progress was witnessed in the spread of branch network of
banks, mobilization of savings and in creating employment opportunities rather than in the improvement
of the services to the customers. Frauds, corruption and misutilisation of public money were this covered.
The vast expansion and spread banking sector resulted in surfacing of several internal deficiencies in the
system. Due to these deficiencies the customer service was attached badly, work technology remained
stagnant and the transactions cost kept on increasing over the years.