History of Banking in India: Key

Points To Remember
Published on Wednesday, January 25, 2017

INTRODUCTION
Banking in India has a very long history
starting from the late 18 th century. The
origin of modern banking started from
1770 in the name of “Bank of Hindustan”
by English agency ‘House of Alexander
& Co’ in Kolkatta however it was closed
in 1832. Further in 1786 “General Bank
of India” was started and it failed in
1791.
PRESIDENCY BANKS
These banks were funded by the
presidency government at that time.
The 3 presidency banks were
o Bank of Bengal- Established in 1806
o Bank of Bombay - Established in
1840
o Bank of Madras - Established in
1843

These three presidency banks were re-

organized and amalgamated to form a
single entity named “Imperial Bank Of
India” on 27 th January ,1927. It was
later transformed into “State Bank Of
India” in 1955.
SOME OF THE OLD BANKS:

o Allahabad Bank was established in

1865 at Allahabad(Uttar Pradesh). It
is the oldest joint stock bank of our
country functioning till today.
o Oudh Commercial Bank was
established in 1881 at
Faizabad(Uttar Pradesh).It is the
First limited liability Bank in India
and also first joint stock bank by
Indians.However it failed in 1958.
o Punjab National Bank was
established in 1895 at
Lahore(pakistan) and it was also the
first bank to be managed solely by
Indians.
IMPACT OF “SWADESHI”
MOVEMENT
Due to the “Swadeshi” movement many
banks were established between 1906
to 1911. Many local
bussinessmen and strong political
figures of India funded the banks for
Indian community. Some of the banks
that were established are as follows:
Name of
Establishment Year
the Bank
Canara
1906
Bank
Bank Of
1906
India
Corporation
1906
Bank
Indian
1907
Bank
Bank Of
1908
Baroda

“The Reserve Bank Of India”

o RBI was established on 1st April
,1935 in accordance with the
provisions of the RBI act,1934.
o It was established under the
recommendations of the“Hilton
Young Commission”also known as
“Royal Commission On Indian
Currency And Finance”.
o Initially it was setup in Calcutta and
permanently moved to Mumbai in
1937.
o Initially the RBI was started with
private share holder’s fully paid up
capital of Rs.5 crores.
 o It also acted as central banking
institute for Mynmar till 1948 and till
1947 for Pakistan.
o The RBI was nationalized on 1st
January, 1949 in accordance with
the RBI(Transfer to Public
Ownership)act,1948.
o It empowered RBI to act as central
banking institution to control
monetary policy of Indian Rupee and
to control,regulate,monitor,inspect
banks in the country as mentioned in
the 2nd schedule of RBI act1934.

SUBSIDIARIES OF RBI
o Deposit Insurance and Credit
Guarantee Coporation(DICGC)was
set up in 1978.
 o National Agriculture and Rural
Development Bank(NABARD) was
set up in 1982.
o National Housing Bank was set up
on 1988.
o Bharatiya Reserve Bank Note
Mudran Private Limited(BRBNMPL)
was set up in 1995.

STATE BANK OF INDIA

o The State Bank Of India was
formerly known as “Imperial Bank Of
India” during the British rule.
o It was established on 1st July,1955
under the recommendations of
“Gorwala committee”.
o It was nationalized on 2nd June,1956
with majority of its share taken by
the Government of India.
 The SBI acts as an agent where the
o

Reserve Bank Of India has no

branch offices.
It has 5 associate banks,State Bank
o

of Bikaner & Jaipur, Hyderabad,

Mysore, Patiala and Travancore.
The following is a list of banks in India:

 1Public-sector banks
 2Private-sector banks
 3Local area banks
 4Small finance banks
 5Payments banks
 6Foreign banks
o 6.1Foreign banks with branches
o 6.2Foreign banks with representative
offices
 7Regional Rural Banks (RRBs)
 8Cooperative banks
o 8.1State Co-operative Banks (SCBs)
 o 8.2Urban Co-operative Banks (UCBs)
o 8.3District Co-operative Central Banks
(DCCBs)
 9See also
 10References
 11External links
Fact Files of Banks in India

The first, the oldest, the largest,

the biggest, get all such types of
informations about Banking in
India in this section.

The first bank in India

Canara
to be given an ISO
Bank
Certification
The first bank in Punjab and
Northern India to get Sind Bank
ISO 9002 certification
for their selected
branches
The first Indian bank
Punjab
to have been started
National
solely with Indian
Bank
capital
The first among the
private sector banks
in Kerala to become a South
scheduled bank in Indian Bank
1946 under the RBI
Act
India's oldest, largest
and most successful
commercial bank, State Bank
offering the widest of India
possible range of
domestic,
international and NRI
products and
services, through its
vast network in India
and overseas
India's second largest
private sector bank The Federal
and is now the largest Bank
scheduled commercial Limited
bank in India
Bank which started as
private shareholders Imperial
banks, mostly Bank of
Europeans India
shareholders
The first Indian bank Bank of
to open a branch India,
outside India in founded in
London in 1946 and 1906 in
the first to open a Mumbai
branch in continental
Europe at Paris in
1974
The oldest Public
Sector Bank in India
having branches all
Allahabad
over India and
Bank
serving the
customers for the last
132 years
The first Indian
commercial bank Central
which was wholly Bank of
owned and managed India
by Indians

Bank of India was founded in 1906

in Mumbai. It became the first
Indian bank to open a branch
outside India in London in 1946
and the first to open a branch in
continental Europe at Paris in
1974.

Keywords:
banking service ,first bank in India, first
Indian bank in world, first bank to get
ISO certificate and many more.

List of Top 10 Banking Companies in India

The Indian banking space is an exciting and
dynamic one. Here is a list of the top 10 banking
companies in the country,going by market
capitalization
HDFC Bank
Going by market capitalization, HDFC Bank is
the largest bank in India. Its market cap is
pegged at about INR 261,226.94 crore.As of end
2014, the bank boasted of a strong network of
3,659 branches in 2,287 cities.To facilitate NRI
banking, the bank also has overseas branches in
Bahrain, Hong Kong, Abu Dhabi, Kenya and
Dubai.HDFC Bank has over 11,633 ATMs and
a customer base of over 28 million. It is also
ranked 45th among the top 50 banks of the
world. Employing over 69,065 employees,
HDFC Bank is one of the strongest contenders
in the private banking space.

State Bank of India

With a market capitalization of about INR
216,128.73 crore, SBI is the second most-valued
bank in India It and is perhaps the most trusted
one, being a state-owned bank. The bank has a
strong network of over 13,000 branches spread
across the nation and has about 190 foreign
offices in 36 countries. Along with HDFC Bank,
SBI also features among the top 50 global banks
(going by market capitalization). It is also one
of the largest employers in the country and
provides employment to over 220,000
personnel. SBI manages assets worth about
USD 390 billion in all. (to be converted into
INR---- otherwise inconsistent)

ICICI Bank Limited

ICICI Bank is the third largest entity in the

Indian banking space, with a market
capitalization of INR 184,547.26 crore.ICICI
Bank has a customer base of over 2.5 million
and boasts of an extensive network of 4050
branches across the country. With 12,475 ATMs
and assets worth USD 99 billion, the bank is
currently celebrating 60 years of existence.
ICICI was formed as a World Bank initiative in
1955.The bank is headquartered in Vadodara,
Gujarat and has an international presence in 19
countries. The bank’s employee strength was
estimated at over 72,000 last year when it
overtook HDFC Bank in terms of people
employed.

Axis Bank
With a market capitalization of about INR
134,685.68 crore, Axis Bank takes its place at
the fourth position among Indian banks.Founded
in 1994 as UTI Bank, Axis Bank now has a
network of 2402 domestic branches and 12922
ATMs spread across the nation.The bank also
has seven international offices including the
ones in Hong Kong, Singapore, Colombo,
Dubai, Abu Dhabi, and Shanghai.Axis Bank
employs over 37,901 employees and is reported
to have net assets worth about USD 53
billion.Apart from retail banking, Axis Bank
also operates in NRI Services, Investment
banking and treasury operations and corporate
banking.
Kotak Mahindra Bank
Kotak Mahindra Bank, headed by Mr. Uday S
Kotak, and with a market capitalisation of INR
109,631.60 crore comes next. Kotak Mahindra
Bank is currently poised for a spectacular
growth due to an all-stockmerger with ING
Vysya Bank. Kotak Mahindra shall now become
the fourth largest private bank in the country in
terms of the business done.The combined
banking company will now have a network of
1,214 branches across the country. The bank is
likely to have an employee strength of about
30,000 after the merger. The combined market
capitalisation is estimated to be about INR 1.25
lakh crore.

IndusInd Bank
Founded in 1994, Hinduja Group owned
IndusInd Bank has a market capitalisation of
about INR 50,100.41 crore. The bank employs
over 15,500 employees and has a network of
638 branches and 1238 ATMs across the
country. With international offices in London
and Dubai, IndusInd Bank is known for its
strong remittances business. The bank has an
exceptionally strong business base in Mumbai,
Delhi, and Chennai.

Bank of Baroda
Bank of Baroda is another large PSU banking
company in India with a market capitalization of
about INR 38601.08 crore.The bank is estimated
to have over 5193 branches and 38,737
employees. With a significant presence in about
25 countries, the Bank of Baroda balances out
NRI services with rural and agricultural finance.
The bank is one of the major banking operators
in India’s rural sectors.

Yes Bank
Yes Bank was incorporated in the year 2004 by
Mr. Rana Kapoor and Mr. Ashok Kapoor, and
currently has a market capitalisation of about
INR 35,169.20 crore.With a strong network of
about over 630 branches in 375 cities, and with
over 1150 ATMs spread across the country, Yes
Bank is among the fastest growing banks of
India. The bank employs about 12000
employees and has high ambitions for the years
to come.

Punjab National Bank

Founded in 1894, Punjab National bank is one
of the oldest banks in India. Unlike most Indian
banks that have their headquarters in Mumbai or
Gujarat, the Punjab National Bank has its
headquarters in Delhi and has a market
capitalization of about INR 30312.73 crore.
Like other PSU banks, the bank has a major
focus on agricultural and rural financing but
also has a widespread international
presence.The bank has 8.9 crore customers,
6081 branches in India and abroad and a
network of 6940 ATMs spread across the
country.

Canara Bank
Canara Bank is another PSU that has made its
mark in the Indian banking sector with a market
capitalization of about INR 18630.10 crore.
Nationalised in 1976, the bank has a network of
about 3600 branches spread across the country.
With 7599 ATMs, the bank is among the first
PSUs in the country to emphasise on e-banking
and online services. Apart from commercial
banking, Canara Bak has also become a strong
provider of corporate banking services in India. *Market
Capitalisation dnata – BSE as of 10, April 2015

The banking in India started with the establishment of the

General Bank of India in 1786. Later the Bank of
Hindustan was also established. However, both the banks
are not in functional state currently. It's the State Bank of
India, which is currently the oldest bank in India in
existence, established in 1806.

Since the beginning, due to huge market potential, a

number of banking companies have come up in India,
which include both, public sector as well as private sector
banks. However, the list of top 10 banking companies in
India has mostly been dominated by the State Bank of
India (SBI).

Since the initial days, the State Bank of India has

dominated the Indian banking industry accounting
for nearly 20% of the Indian banking system's
deposit base. It also has got almost 20% of the credit
portfolio.

CHAPTER-2