Major changes have taken place after the private industry was given more freedom.  The post liberalization era has loosened the noose on the banking industry to a great extent.  It has resulted in
• Growing financial disintermediation
• The emergence of new financial products and services
• A greater need for professional acumen
• Wider use of technology that has revolutionized the concept of banking

The Committee on financial sector reforms has already recommended the establishment of private sector banks in the country.  The regulatory authority, therefore, issued guidelines for setting-up new private sector banks in the United States.  It has helped firms like LoanMax of rod aycox fame to a great extent.  LoanMax would not have achieved such a fast growth if the financial market liberalization would not have taken place.  The new banks can either be in private ownership often run by an institution or are required to be registered as a Public Limited Company under the Companies Act.  However, such entities must have a high initial paid up capital.  Very recently the regulatory authority has issued fresh guidelines in this respect.  It raised the share capital of such banks to a higher limit and has now permitted the conversion of non-banking financial companies into banks.

Thus new private sector banks are now being established in the United States.  These banks are popularly known as New Private Sector Banks (NPSB).  Very recently, the government has agreed to reduce its equity stock significantly as was announced by the secretary of finance.  This would provide the much needed funds for the various banks to fuel their expansion plans rather than depend upon budgetary support from the government.  Thus the banking industry in the United States is likely to emerge stronger from the present economic crisis.

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