The policy initiatives have ushered in greater competitiveness among the banks by granting greater autonomy in deciding upon the instruments to mobilise resources and deploy them accordingly to ensure optimal returns. However, the change in the micro and macro environment of the scheduled commercial banks have not yielded significant gains in terms of interest income/other income, operating profits, net profits and spread. In almost all the positive financial performance indicators the foreign banks are dominating, followed by the public sector banks and the private sector banks.

As the banking institutions expand and become increasingly complex under the impact of deregulation, innovation and technological upgradation, it is critical to maintain balance between efficiency and stability. Today most of the banks in India are increasingly shifting towards universal banking which simply means the `one-stop shop' where banks provide all financial services along with the traditional banking i.e., commercial banking, investment banking including selling of insurance products, etc. In other words, in addition to the traditional conservative banking, it provides wide range of financial and banking services and products under one roof.

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