The document, published by the Scottish Government, calls for a focus on "community banking", better access to loans for smaller businesses and more professional standards.
First Minister Alex Salmond said poor conduct in the sector has led to public hostility which needs to be repaired.
"While the issues of the past must be addressed, we also must work together with the banks and support them in building a new relationship with customers and wider society, one that is firmly based on traditional Scottish banking values so trust can be restored," he wrote in the forward to the Government's document, called Sustainable, Responsible Banking.
Banking is still a major source of employment despite a significant drop in employees since the financial crash of 2007-08. The figure fell from about 52,300 in 2008 to 43,500 in 2011, according to the government document.
Describing Scotland as the "historic home of traditional banking", the report states: "The banks want to change the public's often negative perception of them and they recognise that the only way to do that is to prove to their customers that the desire to change is genuine and that it is for the long term. That is a hugely important step and one that deserves to be supported."
Colin Borland, head of external affairs for the FSB in Scotland, said: "We welcome the Government's proposals to expand the Scottish Investment Bank into a Scottish business development bank. Aligning our enterprise support networks with this new institution also seems like a sensible idea but we must not have another system which creams off whatever is new and trendy without supporting the business base."
Conservative finance spokesman Gavin Brown said the report hints at the prospect of a different regulatory regime in Scotland if it becomes independent after the referendum next year.
He highlighted a passage which states that independence would give ministers the necessary levers to encourage responsible banking: "All banks operating across the UK benefit from working with one set of rules but under independence they would be forced to comply with two. This would bring unnecessary complications and costs to their businesses, costs which would ultimately have to be borne by their customers."