The present paper examines the productivity and profitability in pre and post e-banking periods and highlights the emerging issues and new strategies to enhance the performance of bank groups in today's liberalized, globalized and IT era. The paper concludes that though there is a paradigm shift in the performance of all bank groups in the post e-banking period, new private sector banks and foreign banks have an edge over Public Sector Banks (PSBs). The fully IT-oriented banks have become both a threat and a motivation for the PSBs. The paper stresses on customer-centricism, proficiency in managing assets, technology, skilled staff, transparency, human resource management policies, customer relationship management, and merger and acquisition policies as vital factors to enhance the performance of banks to face the emerging global competition.

The changes, after the liberalization and globalization processes initiated since 1991, have had a significant impact on the financial sector, particularly on the banking industry. The fast pace of the changes have radically and perceptibility transformed the operational environment of the banking sector.The IT revolution is entirely changing the way banking business is done, and has considerably widened the range of products and increased the expected demands of the customers. The world is becoming a global market, characterized by economic interdependence. National boundaries have become less significant with the interlinked effect of technology, information flows and foreign investment mobility.

In the era of liberalization and globalization, the leading banks, therefore, quickly shifted their focus to provide prompt and efficient customer service, offering a variety of hi-tech banking products/services (Vashisht, 2004, p. 2).Economic reforms in the real sectors of an economy fail to realize their full potential without a parallel reform in the financial sector. The financial sector refers to a general improvement in the functioning and efficiency of the financial system as a whole and the removal of impediments to its long-term developments. As a result of financial sector reforms, there is a shift in focus from quantitative to qualitative growth; Indian banking should be subjected to the rigors or prudential norms of operations and competitive environment. Deregulationa vital component of financial sector reformshas increased the overall profitability of the banking industry (Ram Mohan, 2002, p. 397). The banking sector reforms are aimed at enhancing the productivity, efficiency and competitiveness of the banking industry.

Bank Management Journal, E-Banking, Public Sector Banks, PSBs, Human Resource Management Policies, Merger and Acquisition Policies, Customer Relationship Management, Financial Sectors, Globalization, Banking Products, Banking Industry, Product Marketing, Communication Networking Systems, Data Envelopment Analysis, Capital Adequacy Ratio, Indian Financial System.