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Foreign banks and the new private sector banks have embraced technology right from the inception of their operations and therefore, they have adapted themselves to the changes in the technology easily. Whereas the Public Sector Banks (PSBs) and the old private sector banks (barring a very few of them) have not been able to keep pace with these developments.
In this regard, one can cite historical, political and other factors like work culture and working relations (which are mainly governed by bipartite settlements between the managements and the staff members) as the main constraints. Added to these woes, the PSBs were also saddled with some non-viable and loss-making branches, thanks to the social banking concept thrust upon them by the regulatory authorities in 1960s.

Globalisation of financial services

Growing integration of economies and the markets around the world is making global banking a reality. The surge in globalization of finance has also gained momentum with the technological advancements, which have effectively overcome the national borders in the financial services business. Widespread use of Internet banking has widened frontiers of global banking, and it is now possible to market financial products and services on a global basis. In the coming years globalization would spread further on account of the likely opening up of financial services under WTO. India, as you know, is one of the 104 signatories of Financial Services Agreement (FSA) of 1997. This gives India's financial sector including banks an opportunity to expand their business on a quid pro quo basis.

Indian Banks at the global stage: A Reality check

As per Indian Banks' Association report 'Banking Industry Vision 2010', there would be greater presence of international players in Indian financial system and some of the Indian banks would become global players in the coming years.

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* Speech delivered by V. Leeladhar, Deputy Governor, Reserve Bank of India to Kanara Chamber of Commerce and Industry, Mangalore on March 11, 2005.