A Review of Indian Banking Sector and Role of Government in its Development

Abstract

The economic reforms initiated by the Government of India in last two decades have modified the landscape of many sectors of the Indian economy. The Indian banking sector is no exception. This sector goes through major changes as a consequence of economic reforms. The role of this industry is incredibly necessary as one of the leading and principally essential service sector. India is the largest economy in the world having more than 130 crore population. Today in our country the service sector contributes half  the Indian Gross Domestic Product and the most popular service sector in India is banking. The role of banking industry is significant and crucial to accelerate socio-economic development. Banks plays a vital role in developing countries for the economic development. Economic development involves investment in numerous sectors of the economy.  In our country, currently we are having different classes of banks public sector banks, foreign banks, private sector banks both old and new generation, regional rural banks and co-operative banks with the Reserve Bank of as India's central banking institution .The biggest chance for the banking system prevailing today is the consumer. Demographic shifts in terms of financial gain levels and cultural shifts in terms of manner aspirations are modifying the profile of the Indian consumer. The Indian consumer looks to fulfil his lifestyle dreams at a younger age with a mixture of equity and debt to finance consumption and quality asset creation. This is resulting in a growing demand for competitive, subtle retail banking services. This paper explains the dynamical banking situation, the impact of economic reforms and role of different Government policies and schemes related to Banking industry.

Key Words:Economic reforms, Socio-economic development, Demographic shifts, Impact of economic reforms.