The Indian banking sector is going through a major transformation with the changing policies. The role of banking industry is very important and essential service sector. The significant role of banking industry is to enhance economic development. Banks play an important role in the economic development by investing in various sectors.
The changing economic policies of globalization, liberalization and privatization have given rise to new blend of players in the banking industry - public sector banks, private banks, and foreign banks- having their branches in India taking in view satisfaction of customers needs and requirement thereby ensuring customer satisfaction. The emerging competition has generated new expectations from customers. Innovative products have to be therefore introduced in a cost effective manner inline with the technological advancements. With the increasing income levels, customer’s requirements also increase. All these factors lead to a growing demand for competitive, refined retail banking services. This paper explains the changing banking scenario briefly highlighting the challenges and opportunities of Indian banking sector.