The economic growth of any country is ultimately based on the performance of the financial institution especially the banking companies. it is a well know fact that the services offered by Indian banks are well received and recognized by the people who are involving in the money market not only in domestic market but also in foreign market. Though the Indian banks have larger network in terms of branches and employees, the volume of business, the employee's productivity not at satisfactory level compared with those of other countries banks. It is interestingly noted that the problems out of the recession is not so heavily affected in the Indian banks, though majority of the American and European banks experienced serious problems. This is because of the mind setting of the Indian depositors and continues and serious efforts of the reserve bank of India. In the recent days, the Indian nationalized banks are facing innumerable challenges such as worrying level of NPAs, deteriorating asset quality, and increasing pressure on profitability, asset-liability management liquidity risk management, and market risk management and ever tightening prudential norms.