World over, when one wishes to have a safe haven for their funds, it is a Bank that they go to. A bank is a financial institution that accepts deposits from customers and businesses and lends them to earn dividends. A bank is not necessarily regulated by the government of a country but has to follow certain regulations and rules set in the country of their operations.

Banking has changed since its inception in the earlier 14th century. Banking in India is relatively recent although practices similar to those have been followed on a local scale by many. It gained steam in the last century and many organised banking institutions came into existence during that period. But it is not till we gained independence that these banks were regulated under the new laws constituted by the Indian government.

Shortly after independence, laws were passed and the Reserve Bank of India was empowered to be the sole authority to regulate and control the banks existing at that time. It took another decade for the banks to become nationalised i.e. greater control of the government over those banks. It was not until the 1990s that the banking policies were liberalised thereby allowing the private Sector to enter into the fray.

This turned out to be a masterstroke as the Banking Sector grew at much higher rates than the 4% prevalent at that time. Newer banks brought in better technology and updated lending rates and procedures which in a way revolutionized the banking sector in India. This also led to some healthy competition between private banks and their public bank peers, which directly translated into better service for customers.

The growth in the banking sector which had been steadily increasing till then suddenly showed accelerated growth and potential never seen before. The growth has also been profound in the last two decades due to the simultaneous rapid growth in the economy of the country as well. As per recent research, an average Indian working class officer earns anywhere between Rs.14500-Rs.52000 per month, while clerical staff draw in around Rs.6200-23900. The total wage increase for officers and award staff is over Rs.4500 crores.

The banking sector has recently been mobilizing to gain a foothold in the rural areas which have a sizeable portion of the country’s populations. Finance at the micro level is said to be the next big thing in the banking sector. Microfinance will help the economically backward regions to secure loans for amounts which are rarely passed by banks.

The banking sector has undergone continuous changes and has evolved with newer challenges and solutions suited to varying economic climates. It remains to be seen what the next catalyst in the sector will be, that will take it even further.

These new emerging trends in the banking sector would require a cadre of professionals with the right mind-set and skill-set for the services economy.