Far reaching changes are taking place in the financial markets world over. There is greater attention for improving efficiency strengthening the viability of financial institutions. With the advent of globalization and rapid integration of financial markets, our world is growing smaller in every aspect of life. From the global standpoint the size of the banking system is not as important as the level of compliance with the internationally accepted rules and standards and their functionality. One of the focused area of macro economic reforms is the financial sector, its soundness and efficiency. A well functioning banking sector is regarded as the bedrock of a stable financial system. The growing universalization and internationalization driven by the continuous deregulation has increased competition and technological advancement. Banks have transformed themselves from of mere intermediator to one providing quick efficient and consumer centric services. Secondly, there is a linkage between economic reforms and banking sector reforms. The economic reforms brought about large number of problems to be addressed by the financial sector.