Foreign Direct Investment (FDI) is considered the lifeblood of economic development, especially for a developing country like India. It plays an important role in the long-term development of a country not only as a source of capital, but also to improve the competitiveness of the national economy through technology transfer, strengthening infrastructure, increasing productivity and generating opportunities of work. Growth in FDI in Banking Sector: The banking sector in India has shown notable progress in financial health and employment provision in recent years. Banking continues to remain a highly dominant sector in India despite the financial slowdown. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get Original Essay Due to globalization, many Indian banks compete globally by virtue of their innovative products and strong financial standing. Foreign direct investment plays an important role for the host country's economy as it not only provides opportunities to enhance economic development but also opens several doors to optimize national earnings by employing all resources effectively. The financial sector is always the key sector for the overall development of any country, and the banking sector is the primary sector among all. The Indian banking system has come a long way since India adopted economic reforms in 1991. Today, Indian banks are as tech-savvy as their counterparts in developed countries. Competitive and reform forces have led to the emergence of the Internet, e-banking, ATMs, credit cards and even mobile banking to attract and retain a bank's customers. This STUDY aimed to examine the impact of foreign direct investment on the performance of selected public and private sector banks. FDI has a significant positive impact on total activity, business per employee (BPE) and total income of banks. Today, Indian banks are as tech-savvy as their counterparts in developed countries. The competitive and reforming force has led to the emergence of the Internet, e-banking, ATMs, credit cards and even mobile banking, in order to attract and retain customers through banking. As a result of liberalization, privatization and globalization mode, Indian banks going global and many global banks starting operations in India, the Indian banking system is set to involve itself at a whole new level which will help the banking system to grow in strength going into the future. The banking sector plays an important role in the economic development of a country. It provides the lifeblood, the money that supports and promotes growth in all sectors. Foreign direct investment is a tool for economic growth through strengthening domestic capital, productivity and employment. Foreign direct investment also plays a vital role in improving technology, skills and managerial capabilities in various sectors of the economy. Foreign direct investment is seen as an important source of non-debt inflows and is increasingly sought as a vehicle for technological flows and as a means of achieving competitive efficiency by creating a significant network of global interconnections. Foreign direct investments have contributed a lot in improving the efficiency of the Indian banking sector by creating innovative financial products and improving the capitalization of banks making them adaptable to..