The Prime objective of the study was to find out the certain financial and operating issues prevailing in the Public sector banks in India. Issues which are identified in the research study includes:(i) Rise in cyber-attacks,(ii) Money Laundering cases,(iii) Non-Performing Assets of public sector banks,(iv) Inability to implement Basel III due to weak capital position, and (v) Challenges in Financial Inclusion along with low profitability of public sector banks about their massive asset base. The research paper also measures the volatility, systematic risk and unsystematic risk associated with 12 banks that are constituents of the S&P NSE banking index (BANKEX) (Nifty Bank INDEXNSE: BANKNIFTY) based on their daily returns. The Research study is to identify financial and operating risks prevalent in the Public Sector Bank. Parameters such as volatility and total risk change with respect to time, vary with bank, and thus need to be measured to enable better investing decisions. The study measures these parameters for stocks included in the S&P NSE’s banking index (BANKEX) (Nifty Bank INDEXNSE: BANKNIFTY). For volatility, the paper calculates the beta value of stocks with reference to the market index (S&P NSE Nifty). While calculating the value of beta acts as an input for further measuring value of systematic as well as unsystematic risk.