In the early nineties the forces of globalization were

unleashed on the hitherto protected Indian

environment .The branch banking concept with which
we were familiar and practiced since inception was
basically on certain protected fundamentals. The
economy till the nineties provided comfort to public
sector banks in areas of liquidity management in an
administered interest regime , direction of
management was limited and the risk parameters in
these spheres were hazy and not quantifiable.
Globalization , liberalization and deregulation of
financial markets in many develop and developing
countries have resulted in increased disintermediation
and has made commercial banks vulnerable to interest
rate risks. The position was further aggravated with the
relaxation of exchange controls , adoption of uniform
accounting practices ,asset classification and
provisioning norms information technology and
telecommunications are allowing international pooling
of financial resources thereby is severe strain on
interest spread and bottom line of banks.