Banks play an active role in the economic development of a country. Their ability to make a positive contribution in igniting the process of growth depends to a great extent on the way the banking policies are pursued and the banking structure is evolved. It is, therefore, no exaggeration to say that an effective, efficient and disciplined banking system greatly helps the process of economic development. It functions as a catalytic agent for bringing about economical, industrial and agricultural growth and prosperity of the country. The contribution of the banking system is highly significant in the development of the economy of any nation. In the case of developing countries like India, banking system forms an integral and dominant part of the financial system.