Welcome to http://www.meritmock.

com

Please join our Site and like for Latest Updates

www.meritmock.com
(IBPS Aspirants Quick Preparation Revision Portal)
Visit more for Latest Updates.

History of Banking in India

From the ancient times in India, an indigenous banking system has prevailed. The
businessmen called Shroffs, Seths, Sahukars, Mahajans, Chettis etc. had been carrying
on the business of banking since ancient times. These indigenous bankers included very
small money lenders to shroffs with huge businesses, who carried on the large and
specialized business even greater than the business of banks.
Banking In British Era
The origin of western type commercial Banking in India dates back to the 18th century.
Bank of Hinduthan is the first bank in India which started at 1770. This bank is
liquidated in 1829-32.
After this many banks were started and many banks failed. Some banks started at that
time are given below.
Bank name Opened Failed Notable points
Bank of Upper 1863 1913 Some of its assets and liabilities
India transferred to Alliance Bank of
Simla
Oudh 1881 ( in 1958
Commercial Bank Faizabad)
Punjab National 1894 ( In Founder of this bank is Lala
Bank Lahore) Lajpat Rai
Bank of Calcutta 1806 These three banks were merged
and form Imperial bank of India
Bank of Bombay 1840

Bank of Madras 1843

Bank of India 1906
Corp oration bank 1906
Indian Bank 1907
Bank of Baroda 1908
Canara bank Canara Bank
Hindu
Permanent
Fund (1906)
Canara Bank
Ltd (1910)
Central Bank of 1911
India
Allahabad bank 1865 - Oldest Joint Stock bank in India

Exclusively Quick Preparation portal for I. B. P. S. Students 2

www.meritmock.com
www.meritmock.com
(IBPS Aspirants Quick Preparation Revision Portal)
Visit more for Latest Updates.

Post Independence
The Reserve Bank of India, India's central banking authority, was established in
April 1935, but was nationalised on 1 January 1949 under the terms of the Reserve
Bank of India ( Transfer to Public Ownership) Act, 1948.
In 1949, the Banking Regulation Act was enacted which empowered the Reserve
Bank of India (RBI) "to regulate, control, and inspect the banks in India".
The Banking Regulation Act also provided that no new bank or branch of an
existing bank could be opened without a license from the RBI, and no two banks could
have common directors.

Nationalization of Banks
Despite the provisions, control and regulations of the Reserve Bank of India, banks in
India except the State Bank of India (SBI), continued to be owned and operated by
private persons. By the 1960s, the Indian banking industry had become an important
tool to facilitate the development of the Indian economy. At the same time, it had
emerged as a large employer, and a debate had ensued about the nationalization of the
banking industry.
Indira Gandhi, the then Prime Minister of India, expressed the intention of the
Government of India in the annual conference of the All India Congress Meeting in a
paper entitled "Stray thoughts on Bank Nationalization. The meeting received the paper
with enthusiasm.
Thereafter, her move was swift and sudden. The Government of India issued an
ordinance ('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance,
1969') and nationalised the 14 largest commercial banks with effect from the midnight of
19 July 1969. These banks contained 85 percent of bank deposits in the country.
Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke
of political sagacity." W ithin two weeks of the issue of the ordinance, the Parliament
passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it
received the presidential approval on 9 August 1969.

Exclusively Quick Preparation portal for I. B. P. S. Students 3

www.meritmock.com
www.meritmock.com
(IBPS Aspirants Quick Preparation Revision Portal)
Visit more for Latest Updates.

A second dose of nationalisation of 6 more commercial banks followed in 1980. The

stated reason for the nationalisation was to give the government more control of credit
delivery. W ith the second dose of nationalisation, the Government of India controlled
around 91% of the banking business of India.
Later on, in the year 1993, the government merged New Bank of India with Punjab
National Bank. It was the only merger between nationalised banks and resulted in the
reduction of the number of nationalised banks from 20 to 19.
Liberalization after 1990s
In the early 1990s, the then government embarked on a policy of liberalization, licensing
a small number of private banks. These came to be known as New Generation tech-savvy
banks, and included Global Trust Bank (the first of such new generation banks to be set
up), which later amalgamated with Oriental Bank of Commerce, UTI Bank (since
renamed Axis Bank), ICICI Bank and HDFC Bank.
This move, along with the rapid growth in the economy of India, revitalised the banking
sector in India, which has seen rapid gro wth with strong contribution from all the three
sectors of banks, namely, government banks, private banks and foreign banks.

History of State bank of India

The largest bank, and the oldest still in existence, is the State Bank of India. It originated
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 funded by a presidency government, the other two were
the Bank of Bombay and the Bank of Madras. The three banks were merged in 1921 to
form the Imperial Bank of India, which upon India's independence, became the State
Bank of India in 1955.
After this, SBI has acquired some local banks with its control. These are called as
subsidiaries 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)

Exclusively Quick Preparation portal for I. B. P. S. Students 4

www.meritmock.com
www.meritmock.com
(IBPS Aspirants Quick Preparation Revision Portal)
Visit more for Latest Updates.

Current banking In India

The Indian banking sector is broadly classified into scheduled banks and non-scheduled
banks. All banks which are included in 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
categorized into five different groups according to their ownership and/or nature of
operation:
State Bank of India and its Associates
Nationalised Banks
Private Sector Banks
Foreign Banks
Regional Rural Banks.

Some GK Questions on Banking

First bank established in India Bank of Hindustan in

1770
Second bank General Bank of India,
1786
Oldest bank in India originated in the Bank of State Bank of India
Calcutta in June 1806 which was still in existence
First Indian bank got ISO Canara Bank
First India bank started solely with Indian capital PNB (Punjab National
investment is Bank)

Exclusively Quick Preparation portal for I. B. P. S. Students 5

www.meritmock.com
www.meritmock.com
(IBPS Aspirants Quick Preparation Revision Portal)
Visit more for Latest Updates.

Founder of Punjab National Bank is Lala Lajpat Rai

Reserve bank of India (RBI) was instituted in 1935
First governor of RBI Mr.Osborne Smith
First Indian Governor of RBI Mr. C D Deshmukh
First bank to introduce savings account in India Presidency Bank in 1833
First bank to introduce cheque system in India Bengal Bank in 1833
First bank to introduce internet banking ICICI bank
First bank to introduce mutual fund State Bank of India
First bank to introduce credit card in India Central Bank of India
W hich cards are known as plastic money Credit Cards.
Open market operations are carried out by RBI
Capital market regulator is SEBI
Largest Commercial bank in India State Bank of India
The International Bank for Reconstructio n and World Bank
Development (IBRD) is known as
Indias First Financial Archive has been set up at Kolkata
CRR, SLR, Repo Rate, Reverse Repo rate are decide by RBI
Savings banks interest rates, fixed deposit interest Individual banks
rates, Loan Rates etc. are decided by
The bank which has launched Mobile Bank Accounts HDFC Bank
in association with Vodafones m paisa
Minimum money transfer limit through RTGS 2 Lakhs
Maximum money transfer limit through RTGS No Limit
Minimum & Maximum money transfer limit through No Limit
NEFT
NABARD was established in July, 1982
Largest Public sector bank in India SBI
Largest Private sector bank in India ICICI Bank
Largest Foreign bank in India Standard Chartered Bank
First Indian bank to open branch outside India i.e. Bank of India

Exclusively Quick Preparation portal for I. B. P. S. Students 6

www.meritmock.com
 Thank you MM Reader.
Visit more for Daily updates