While new generation private sector banks have been able to create a niche in this regard, the public sector banks have not lagged behind. Leveraging their vast branch network and outreach, public sector banks have aggressively forayed to garner a larger slice of the retail pie. By international standards, however, there is still much scope for retail banking in India.
However, banks, as financial intermediaries and providers of financial services, play a special role in an economy. A crisis of one major bank, let alone the whole banking system, would have a serious impact on economic activity, and this also goes for the real sector.