Public Sector Banks in India have shouldered many reforms in the past decades. Currently, public sector banking is undergoing a huge crisis. The objective of this research paper is to provide solutions for establishing a safe and stable Public sector Banking in India. In order to provide proper solutions, a brief history has been explained, and also statistics has been used to analyse the current situation. The challenges are mentioned by categorising them under different heads dealing with issues of NPAs, recapitalization burden, governance issues, lack of quality of human resource, etc. Considering these mentioned challenges as the basis, recommendations have been provided for governance reforms and finance reforms. An attempt was made to critically analyse the situation by providing examples from foreign countries, taking into account Indian background. On a concluding note, solutions have been provided in such a manner keeping the character of Public Sector Banks as such, without focussing much on privatisation. Emphasis has been given to radical reconstruction policies. Best efforts have been undertaken to address the major issues faced by PSBs.
