This has been aided to some extent by its increasing branch network. Commercial Banks provide banking services and finance working capital. Historically, the Indian banking sector had been highly regulated. Lending and interest rates on domestic term deposits have been freed. Accounting disclosures, income recognition and loan loss provisioning norms are stricter.
Banks have to be adequately capitalized in line with international standards.
Banks are allowed to provide long-term loan, and take up leasing and other financial services. Banks are required to set up asset liability management committees. Indian banks remain grossly overstaffed due to strong unions and lack of any exit policy. The high expenditure on employee salaries leaves little money for technology upgradation. The technology usage in Indian banks is very low.