Banking industry became one of the fastest growing sectors after the first phase of economic reforms in 1991. Banking sector has played a vital role in the overall economic development of the country right from the time of nationalization. Due to globalization the Indian Public sector banks have been facing keen competition from the Private Sector and Foreign banks. As is well known survival of the fittest is the core theme in the global market today. Sustenance and growth of public sector banking is very much essential for balanced and effective economic development. Increased competition has made this a challenging task. In the 21st century Indian banking system has been changing tremendously in different ways. The financial innovation is essential part of the banking. Right from the beginning stage of financial modernization innovation have been playing role in cut down financial exclusions and improving the ways of banking services are rendered to people. Technologies play a tremendous role to win the hardcore loyal customers in banking industry.