Indian banking system has performed well during the year 2004-05, in an environment of rising interest rates and falling treasury income from G-Sec trade. PSBs have stood up to the challenges of competition, even though they do not enjoy a level playing field. There is a need to attract FDI into banks and Asset Reconstruction Companies to sustain the forward march.

The year 2004-05 was significant for the banking system in India, as it weathered the storm of rising interest rates and falling bond values, by strategically augmenting bank credit, in an environment conducive for economic growth. The year also saw the birth of a new private sector bank, namely Yes Bank. During the year 2005, two mergers, the first one between IDBI Bank Ltd., and IDBI Ltd., and the second one between Bank of Punjab and Centurion Bank took place.

First the member count: A new bank named "Yes Bank" commenced its operations during August 2004, as the ninth new generation private sector bank. Headquartered at Mumbai, it proposes to extend banking and financial services in areas like corporate finance, retail banking and investment banking. It proposes to offer financial market products and services. Yes Bank happens to be the only bank with a Greenfield license that has been awarded by the RBI in the last 10 years. There is financial participation by Rabobank of Netherlands with an equity stake of 15%. The bank raised Rs. 315 cr of equity capital through its maiden IPO during June 2005.

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