Introduction of Banking History in India
Banking History in India has a very long starting from the late 18th century. The source of present-day banking started from 1770 for the sake of “Bank of Hindustan” by English office ‘Place of Alexander and Co’ in Kolkatta anyway it was shut in 1832. Further in 1786 “General Bank of India” was started and it bombed in 1791.
Nationalization Of Banks
Regardless of the arrangements, control, and guidelines of the Reserve Bank of India, banks in India with the exception of the State Bank of India (SBI), kept on being possessed and worked by private people. By the 1960s, the Indian banking industry had become a significant device to encourage the advancement of the Indian economy. Simultaneously, it had developed as an enormous business, and a discussion had resulted in the nationalization of the banking business.
Indira Gandhi, the then Prime Minister of India, communicated the goal of the Government of India in the yearly gathering of the All India Congress Meeting in a paper entitled “Stray musings on Bank Nationalization”. The gathering got the paper with excitement.
From there on, her move was quick and abrupt. The Government of India gave an ordinance (‘Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969’) and nationalized the 14 biggest business banks with impact from the 12 PM of 19 July 1969. These banks contained 85 percent of bank stores in the nation.
Jayaprakash Narayan, national chief of India, depicted the progression as a “masterstroke of political astuteness.” Within about fourteen days of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it got the presidential endorsement on 9 August 1969.
The second portion of the nationalization of 6 increasingly business banks followed in 1980. The expressed purpose behind the nationalization was to give the government more control of credit conveyance. With the second portion of nationalization, the Government of India controlled around 91% of the banking industry of India.
Later on, in the year 1993, the government combined the New Bank of India with Punjab National Bank. It was the main merger between nationalized banks and brought about a decrease in the quantity of nationalized banks from 20 to 19.
These banks were funded by the presidency government at that time. There are 3 presidency banks –
- Bank of Bengal- Established in 1806
- Bank of Bombay – Established in 1840
- Bank of Madras – Established in 1843
These three presidency banks were re-sorted out and amalgamated to form a solitary entity named “Magnificent Bank Of India” on 27th January 1927. It was later transformed into “State Bank Of India” in 1955.
Some of the Old Banks
Allahabad Bank was established in 1865 at Allahabad (Uttar Pradesh). It is the most seasoned joint-stock bank of our nation working until today.
Oudh Commercial Bank was established in 1881 at Faizabad (Uttar Pradesh). It is the First restricted obligation Bank in India and furthermore first joint-stock bank by Indians. However, it flopped in 1958.
Punjab National Bank was established in 1895 at Lahore (Pakistan) and it was also the first bank to be overseen exclusively by Indians.
Impact of “Swadeshi” Movement
Due to the “Swadeshi” movement, many banks were established between 1906 to 1911. Many local businessmen and strong political figures of India subsidized the banks for an Indian people group. A portion of the banks that were established are as per the following:
|Name of the Bank||Establishment Year|
|Bank Of India||1906|
|Bank Of Baroda||1908|
Current Banking In India
The Indian banking sector is comprehensively grouped into scheduled banks and non-scheduled banks. All banks which are remembered for the Second Schedule to the Reserve Bank of India Act, 1934 are Scheduled Banks. These banks comprise Scheduled Commercial Banks and Scheduled Co-operative Banks.
Scheduled Co-operative Banks consist of Scheduled State Co-operative Banks and Scheduled Urban Cooperative Banks. Scheduled Commercial Banks in India are arranged into five unique gatherings according to their possession or potentially nature of the activity:
- State Bank of India and its Associates
- Nationalized Banks
- Private Sector Banks
- Foreign Banks
- Regional Rural Banks.
History Of State Bank Of India
The largest bank, and the oldest still in presence is the State Bank of India. It started as the Bank of Calcutta in June 1806. In 1809, it was renamed as the Bank of Bengal. This was one of the three banks financed by an administration government, the other two were the Bank of Bombay and the Bank of Madras. The three banks were converged in 1921 to shape the Imperial Bank of India, which upon India’s autonomy, turned into the State Bank of India in 1955.
After this, SBI has procured some nearby banks with its control. These are called as backups of SBI. They are
- State Bank of Bikaner and Jaipur (SBBJ)
- State Bank of Hyderabad (SBH)
- State Bank of Mysore (SBM)
- State Bank of Patiala (SBP)
- State Bank of Travancore (SBT)
“The Reserve Bank Of India”
- RBI was established on 1st April 1935 as per the arrangements of the RBI act,1934.
- It was established under the suggestions of the”Hilton Young Commission” also known as “Imperial Commission On Indian Currency And Finance”.
- Initially, it was an arrangement in Calcutta and for all time moved to Mumbai in 1937.
- Initially, the RBI was begun with private investor’s completely settled up capital of Rs.5 crores.
- It also acted as a central financial establishment for Myanmar till 1948 and till 1947 for Pakistan.
- The RBI was nationalized on 1st January 1949 as per the RBI (Transfer to Public Ownership) Act,1948.
- It enabled RBI to act as the central financial organization to control the fiscal arrangement of Indian Rupee and to control, regulate, monitor, inspect banks in the nation as referenced in the second calendar of RBI act 1934.
First In Banking Systems
1. The First Bank in India – Bank of Hindustan
2. First Governor of RBI – Mr. Osborne Smith
3. First Indian governor of RBI – Mr. C D Deshmukh
4. First Bank to Introduce ATM in India – HSBC
5. First Bank to introduce saving Bank in India – Presidency bank in 1830
6. First Bank to Introduce Cheque system in India – Bengal Bank 1784
7. First Bank to introduce Internet Banking – ICICI BANK
8. First Bank to introduce Mutual Fund – State Bank of India
9. First Bank to introduce Credit Card in India – Central Bank of India
10. First Foreign Bank in India – Comptoire d’Escompte de Paris of France in 1860
11. First Joint Stock Bank of India – Allahabad Bank
12. First Indian bank to open branch outside India in London in 1946 – Bank of India
13. First Indian Bank started with Indian capital – Punjab National Bank
14. First Regional Rural Bank name Prathama Grameen Bank was started by – Syndicate Bank
15. First Universal Bank in India – ICICI Bank
16. First bank in India listed in New York Stock Exchange (NYSE) – ICICI Bank
17. First Bank in India to launch Talking ATMs for differently able person – Union Bank of India
18. First Bank in India to launch its own Payment Aggregators – State Bank of India. (SBIePay)
19. Country’s first all-woman bank – Bhartiya Mahila Bank
20. First India bank Got ISO – Canara Bank.
21. First Co-Operative Bank in India Anyonya Co-operative Bank
Banking History in India
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