Banking sector reforms were introduced to remove the deficiencies in banking sector. The lack of autonomy is reflected in the fact that there is a common wage package for all bank employees irrespective of the health of the bank concerned. Kannan, the Chief Executive Officer of Bank of Baroda, says: "Give us the freedom to fix our own wages and offer market remuneration to professionals. Do not tie us down to a common wage structure. Let each bank decide its appropriate level of wages." The paper makes an effort to first jot down the major reform measures and policies regarding the banking industry by the government of India and the RBI. Secondly, the paper will try to study the major impacts of those reforms upon the banking industry. These reforms have some positive responds on various economic variables like enhancing the role of market forces, huge decline in the rate of interest, reduction of NPAs, up gradation of technology etc.