It requires a cultural revolution in the banking sector, particularly for public sector banks if they wish to retain the competitive advantage of size over the smaller but more nimble footed private sector/ foreign banks. Regulatory / supervisory environment One of the essential pre-requisites for attaining sustained growth is financial stability, which in turn requires a combination of strong regulation and supervision.
The regulators and supervisors need to be abreast of the changing contours of the financial system, be aware of the changes in the way banks do business, new products and services, the risks and the mitigants.