Although the Indian banking industry is nearly two hundred years old, it is only since
the last fifteen years that it has witnessed radical transformation of internal operations as well as products and services. Two significant developments have influenced the functioning of the industry. The first occurred in 1969 when the Indian government
nationalized a large number of banks, forcing them to look beyond urban markets
and initiate operations in the rural sectors. The next big move came in the 1990s in
the form of deregulation, which led to the birth of new generation private banks on
the heels of foreign institutions that had been permitted entry through relaxation of
FDI norms. These paved the way for an era of intense competition and technology-led
transformation within the industry. New entrants leveraged a combination of people, processes and technology to transform the way products and services were delivered to their customers.