Why was liberalization a massive change in the history of Indian banking?

         In its literal sense, ‘liberalization’ means relaxation of restrictions or regulations. It was a policy adopted in our country almost two decades ago. It was introduced in the 1990s in our banking sector too. Manmohan Singh was the finance minister then. So, what exactly did this process mean?

        Liberalization as a policy meant the removal of some restrictions imposed by the government on its various sectors.

         The move towards liberalization not only enhanced the growth of our economy, but also boosted our banking system.

          Till then, there were strict regulations on many matters including the interest rate, lending, and foreign participation.

          With liberalization, many private banks were given license to operate in the country. These banks including the ICICI Bank, Induslnd Bank, HDFC Bank, Axis Bank etc are popularly known as the new generation banks. Contributions from the public sector, private sector and foreign banks together made the system stronger and stable.