The banking sector is the dominant sector which is considered as the key to savings for the local public and for the Government a source of GDP. Banking in India originated in the last decades of the 18^th century. Since its inception it’s the achievements and criticism that we read of, the challenges faced by this sector have been never stressed on. Do the banks actually face challenges and how can they overcome it. Since the turn of the century, and in today’s technological era there has been a noticeable upsurge in transactions through ATMs, and also through the internet and mobile phones. But is this technology a boon or a bane to the banking sector. The paper reviews the Challenges faced by the banking sector and how can they be overcome and studies if technology is helping the sector or is a challenge to be faced indirectly.

KEYWORDS:  GDP, Banking sector, Challenges, Technological era, Boon or bane.