was relatively fragmented in nature as there were different and often contradictory laws that were put in place to basically govern the commercial banking sector of the country. This era of fragmented laws however, allowed banks to remain profitable as under regulations they were specifically given the different products and services to sell rather than allowing them freely to engage themselves into activities that were more speculative in nature. This was also due to the fact that a mismatch between the different regulatory environments of the country allowed commercial banks to basically insulate themselves against the different economic shocks as their overall scope was limited through these regulations. For example, under special legislative process, banks were given the monopoly over certain products such as checking accounts which basically restricted other financial institutions to float any such product. Further, the legislations also allowed the banks to avoid direct competition as there were restrictions on the inter-state opening of the branches. It is also critical to understand that the banks were specifically restricted to offer interest rates on the checking accounts thus restricting them to engage into price wars and keep themselves under restricted conditions so as to basically allow all the banks to operate at even terms.
The era before 1980s was therefore an era which basically restricted the encroachment of other institutions to take over the role of banks thus allowing banks to compete among themselves rather than competing with a variety of other financial institutions thus increasing the overall competition within the industry.
The era after 1980s and up to 1999 was an era which made a swift transition from the above sets of regulations and as such the overall position enjoyed by the banks were taken over and as a result many banks failed and insolvencies increased. This has been the result of gradual changes in the regulations which