CHALLENGES FOR PUBLIC SECTOR BANKS ININDIA-A BRIEF SKETCH
KAHKASHAN ANJUMYOUNG SCHOLAR
(YOUNG SCHOLARS AWARD SCHEME-2009)
"...to regulate the issue of Bank Notes and keeping of reserves witha view to securing monetary stability in India and generally tooperate the currency and credit system of the country to itsadvantage."
Without a sound and effective banking system in India it cannot have ahealthy economy. The banking system of India should not only be hassle free butit should be able to meet new challenges posed by the technology and any other external and internal factors.For the past three decades India's banking system has severaloutstanding achievements to its credit. The most striking is its extensive reach. Itis no longer confined to only metropolitans or cosmopolitans in India. In fact,Indian banking system has reached even to the remote corners of the country.This is one of the main reasons of India's growth process.The government's regular policy for Indian bank since 1969 has paid richdividends with the nationalisation of 14 major private banks of India.Not long ago, an account holder had to wait for hours at the bank countersfor getting a draft or for withdrawing his own money. Today, he has a choice.Gone are days when the most efficient bank transferred money from one branchto other in two days. Now it is simple as instant messaging or dials a pizza.Money has become the order of the day.Banking in India originated in the last decades of the 18th century. Theoldest bank in existence in India is theState Bank of India, a government-owned bank that traces its origins back to June 1806 and that is the largest commercial bank in the country. Central banking is the responsibility of theReserve Bank of India, which in 1935 formally took over these responsibilities from the thenImperial Bank of India, relegating it to commercial banking functions. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. In 1969 the government nationalized the 14 largest commercial banks; the government nationalized the six next largest in 1980.