Prof. Jayant V. Joshi

ABSTRACT

Private banking in India was practiced since the beginning of banking system in India. All the banks in India were earlier private banks. They were started in the pre-independence era to cater the baking needs of the people. But after nationalization of banks in 1969 public sector banks occupied dominant role in the banking structure. PSBs and old private sector banks realized their new role and also welcomed the new generation bin 1994 when Reserve Bank of India encourage selling up of privale banks as part of its policy of liberalization of the Indian banking industry. HDFC was among the first to receive an in principle approval from the Reserve Bank of India (RBI) to set up a bank in private sector. Among the 29 private sector banks in India today, we have 21 old and 8 new banks, which are able to sustain the competition. These new privale banks have the advantage of starting with a clean state, adequale capital resources, welltrained professional manpower, and absence of non-performing loans in their books, computerization, and lean organizational system handful of branches in chosen centers, a new variely of products and services elc. In this paper an attempt is made to through light on role of private banks in shaping up the Indian economy, private banks are providing satisfactory services to his customers and thereby playing a key role in the development of Indian economy.