Challenges of Indian Banks in the Emerging Scenario

Indian banks have scaled newer heights arguably to be reckoned as one of the dominant forces in the world banking arena backed by what is evident in terms of coverage, quantum of deposits, diversification of advances, risk management strategies, customer relationship management and extensive use of technology. The above settings enhanced the image of Indian banks by gaining the confidence of the depositors and other stakeholders, ensuring their sustainability and strong presence to dominate the Indian financial sector for the years to come. The increased use of technology, the presence of a large percentage of unbanked populace, the emerging techno savvy customers, financial inclusion drives, the inflow of foreign exchange, economic growth prospects, increasing income level of people and encouraging internal as well as external environment, give immense opportunities for banks in India to flourish as ever. The Indian Banking system is well anchored on the edifice of prudent money, thanks to the hegemony of a conservative finance that ruled the roost right from the very inception of banks in its modern form, inherited from the ancient Indian laws of Manu and Kautilya down to the colonial legacies converging into what is spearheaded by RBI in monitoring the entire banking system of the country. Notwithstanding these positives, the problem of NPAs and bank frauds hang like Damocles Sword over the finances of banks, which might lead to bank failure resulting in tremendous loss to depositors and stakeholders.