The banking sector indicators in India need to be seen against the backdrop of increased vulnerability of the financial systems of developing countries and the need for improving its efficiency and stability. The Narasimham Committee has presented a detailed analysis of various problems and challenges facing the Indian banking system and made wide-ranging recommendations for improving and strengthening its functions.
Let me shortlist a few key areas, which must concern us at this stage. The Indian banking system is still perceived as a relatively high cost banking. This is because of the relatively high operating cost of the banking system.