Since independence, banking in India has evolved through four distinct phases.
1. Foundation Phase: It lasted through the decade of 1950s and 1960s. This phase witnessed the development of necessary legislative framework for facilitating the functioning of the banking system for meeting the requirement of the Indian economy.
2. Expansion Phase: This began in mid 1960s and gained momentum after the nationalisation in the late 1960s.
3. Consolidation Phase: This phase began around 1985. During this phase, attention was paid to improving housekeeping, customer service, credit management, staff productivity and profitability of the banks.
4. Reform Phase: Beginning 1991, this phase saw important initiatives like introduction of new accounting practices, development of norms relating to income recognition and capital adequacy. This phase also saw an increasing trend towards the consolidation process driven by competition