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.