Abstract: Banking business in India is largely governed by the banking regulation act 1949 section 5(b) “a bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities either directly by loaning or indirectly through capital markets. A bank links together customers that have capital deficits and customer with capital surplus.” Without a sound and effective banking system in India it cannot have healthy economy. The banking system in India should not only be hassle free but it should be able to meet new challenges posed by technology and any other external and internal factors. Banking plays a significant role in financing the economic needs of the country. To compete effectively in present day competitive world banks have been permitted to undertake new activities such as investment banking securities trading insurance business etc. Private banking is all about personal service and relationship built around you. It is about delivering sophisticated solutions to complex financial problems seeing your affairs in totality and offering individual advice and tailored solutions. “One claiming to be a banker must profess himself to be one and the public must accept him as such his main business must be that of banking from which generally he should be able to earn his living.