Banking Industry in India

Banking Industry in India
Table of Contents
Introduction ................................................................................................................................ 2
Evolution of the Indian banking sector .............................................................................. 4
Types of Banks in India............................................................................................................ 9
Market Size ................................................................................................................................ 16
Statistics ..................................................................................................................................... 18
Government Initiatives & Budget Highlights.................................................................. 20
Growth Drivers ......................................................................................................................... 22
Investments/Developments ................................................................................................. 23
Industry Trends & Opportunities ....................................................................................... 24
An overview of the digital lending market ...................................................................... 29
Government Schemes ............................................................................................................. 31
Government Agencies............................................................................................................. 33
Disclaimer.................................................................................................................................. 34
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Introduction
Despite recent upheavals throughout the world, India's banking sector has long
been one of the most stable. Thanks to a prolonged period of low non-performing
loan activity and sufficient capital and liquidity buffers, the Indian banking system is
in good health.
Recent years have seen the introduction of novel banking models like payments and
small finance banks in the Indian banking sector. Through a number of initiatives,
including the Pradhan Mantri Jan Dhan Yojana and Post Payment Banks, India has
also concentrated on expanding the reach of the banking sector in recent years.
These kinds of programmes, when paired with significant banking sector reforms
like neo-banking, digital payments, the growth of Indian NBFCs, and fintech, have
greatly improved India's financial inclusion and fueled the nation's credit cycle.
The percentage of the population having bank accounts rose from 53% in FY 16 to
78% in FY 21. The Gross Non-Performing Asset (GNPA) of SCBs dropped to a 7-year
low of 5% in September of 2022, and the Net NPA dropped to a 10-year low of 1.3
percent for the first time. The decreasing GNPA ratio of NBFCs, which reached
nearly pre-pandemic levels in September 2022 after peaking at 7.2 percent in June
2021 during the second wave of the pandemic, is evidence of the ongoing
improvement in asset quality.

More than 1.6 lakh bank branches exist, or roughly 15 branches for every lakh
people. A network of 2.17 lakh ATMs, of which 47% are located in rural and semi-
urban areas, further supports this. Banking services have been made available to
every village within a 5-kilometer radius in 25 states and 7 Union Territories,
accounting for 99.94 percent of all villages.
The Indian fintech industry is expected to be worth US$ 150 billion by 2025. India
has the world's third-largest FinTech ecosystem. India is one of the world's fastest-
growing fintech markets. In India, there are currently over 2,000 Financial
Technology (FinTech) companies that have received DPIIT recognition, and the
number is growing quickly.
India's digital payments system has evolved the most among 25 countries, with
India's Immediate Payment Service (IMPS) ranking fifth in the Faster Payments
Innovation Index (FPII). In recent years, India's Unified Payments Interface (UPI)
has worked to expand its global reach while also revolutionising real-time
payments.

Evolution of the Indian banking sector
India's banking history began prior to the country's 1947 declaration of
independence. Three stages can be distinguished in the development of the banking
industry:
Phase I: From 1770 to 1969 was the Early Phase.
Phase II: From 1969 to 1991, there was a phase of nationalisation.
Phase III: Starting in 1991 and continuing to this day, the phase known as the
Banking Sector Reforms phase or Liberalization
Pre Independence Period (1786-1947)
Founded in 1770 and housed in Calcutta, the Indian capital at the time, the "Bank of
Hindustan" was the country's first bank. But this bank didn't function well, and it
shut down in 1832.
Though more than 600 banks were registered in the nation prior to independence,
only a small number of them were able to endure.
Numerous other banks were founded in India by following the example set by Bank
of Hindustan.
They were:
The General Bank of India (1786-1791)
Oudh Commercial Bank (1881-1958)

Bank of Bengal (1809)
Bank of Bombay (1840)
Bank of Madras (1843)
Three banks known as the Presidential Banks were founded by The East India
Company during British rule in India: Bank of Bengal, Bank of Bombay, and Bank of
Madras. Subsequently, in 1921, these three banks amalgamated to form the
"Imperial Bank of India."
Later, in 1955, the Imperial Bank of India was nationalised and renamed The State
Bank of India, which is the biggest public sector bank at the moment.
The list of additional banks that were founded during the Pre-Independence era is
provided below:
Allahabad Bank 1865
Punjab National Bank 1894
Bank of India 1906
Central Bank of India 1911
Canara Bank 1906
Bank of Baroda 1908

Post Independence Period (1947-1991)
At the time of India's independence, all of the country's major banks were privately
owned, which was a source of concern because people in rural areas relied on
money lenders for financial assistance.
At the time, the government decided to nationalise the banks in an attempt to
address this issue. Under the terms of the 1949 Banking Regulation Act, these banks
were nationalised. In contrast, the Reserve Bank of India was nationalised in 1949.
Subsequently, the State Bank of India was established in 1955, and between 1969
and 1991, the remaining 14 banks were nationalised. These were the banks with
over 50 crores in national deposits.
Liberalisation Period (1991-Till Date)
Following the establishment of banks in the country, rules and regular oversight are
required to sustain the profits generated by the banking industry. The final or
continuing stage of the development of the banking industry is extremely important.
The establishment of private sector banks in India was the largest change. Ten
private sector banks were granted permission by RBI to open for business in the
nation.

These banks included:
Global Trust Bank (now Oriental bank of Commerce)
ICICI Bank
HDFC Bank
Axis Bank
Bank of Punjab
IndusInd Bank
Centurion Bank
IDBI Bank
Times Bank
Development Credit Bank
The banks Kotak Mahindra Bank (2001), Yes Bank (2004), IDFC (2015), and
Bandhan (2015) joined the league in a short period of time.
The other measures taken include:
• Opening of branches of various foreign banks in India
• There could be no more bank nationalisation.
• The committee declared that the government and RBI would handle banks in
the public and private sectors equally.
• Any foreign bank could form partnerships with banks in India.

• Along with advancements in technology and banking, payment banks were
introduced.
• Small finance banks were permitted to open branches all over India.
• With internet banking and fund transfer apps available, a significant portion
of Indian banking has moved online.

Types of Banks in India
❖ Commercial banks
Commercial banks in India exist solely to generate revenue through deposits and
loaning money. The 1949 Banking Regulation Act established regulations for
commercial banks. Receiving deposits and disbursing loans to various individuals,
companies, and governmental bodies is their primary function. Commercial banks
fall into four categories and can be owned by either the government or the private
sector:
Public Sector Banks
The Government of India holds the lion's share of stock in these banks. The
government oversees public sector banks in India, which aim to instil confidence in
their clientele by ensuring their money is secure. Financial regulations are issued by
the government to India's public sector banks. When it comes to fees, these banks
are less expensive than private banks. These banks also launch a range of financial
initiatives for the good of the public.
SBI is one of India's biggest public banks by total amount of money handled. Its
inclusion in the world's top 50 banks was ensured by its merger with five associate
banks. The government's nationalisation of state banks contributed to the expansion
of public banks in India.

Private Sector Banks
The stock in these banks is primarily owned by a private company, an individual, or
a group of individuals. The Reserve Bank of India (RBI) establishes the guidelines
that apply to private sector banks in India.
These include banks in which private shareholders hold major stakes or equity. All
the banking rules and regulations laid down by the RBI will be applicable to private
sector banks as well. Given below is the list of private-sector banks in India.
Foreign banks:
These banks have branches in India but their main offices are located abroad.
Regional rural banks:
These are special commercial banks that lend money to farmers in rural areas at a
discounted interest rate in an effort to strengthen the local economy.

❖ Co-operative banks
By offering agriculture and related industries short-term, low-interest loans,
cooperative banks were established to improve social welfare. Financial institutions
known as cooperative banks were founded on a cooperative model and are owned
by their members. In other words, a cooperative bank's clients are also its owners.
These can also be divided into:
• Rural co-operative banks:
These primarily fund small-scale businesses, self-employment, and agriculture-
related endeavours like farming, dairy farming, and fish farming.
• Urban co-operative banks:
These banks provide financing for self-employment, industries, small-scale
businesses, and home ownership.

❖ Specialized banks
Between 1982 and 1990, the government established a number of specialised
banking institutions with specific requirements for industries such as agriculture,
foreign trade, housing, and small businesses. The evolution of financial services in
India began with notable financial institutions like:
• NABARD (National Bank for Agriculture and Rural Development, 1982) to
support agricultural activities.
• EXIM Bank (Export-Import Bank of India, 1982) promotes export and import.
• The National Housing Bank was established in 1988 to help finance housing
projects.
• SIDBI (Small Industries Development Bank of India, 1990) to finance small-
scale industries.

❖ Payment Banks in India
Intended to function on a smaller scale with less credit risk, payments banks are a
relatively new type of bank that was conceived by the RBI in 2014. Offering banking
and financial services to the underbanked and unbanked populations was the
primary goal in advancing financial inclusion.
Payments banks have certain restrictions; they are not able to grant loans or credit
cards and can only take deposits of up to ₹2 lakhs per customer. On the other hand,
they can provide debit and ATM cards, net and mobile banking, current and savings
accounts, and more. The development of e-banking in India was characterised by the
ease of using mobile apps to make online payments.
Airtel Payments Bank, established by Bharti Airtel, is an example of a payment bank
in India. Given that they provide online payment options such as mobile payment
apps, these banks have a significant part to play in the development of e-banking in
India.

❖ Digital banking in India
The digitization of all banking functions that were previously restricted to in-person
visits to bank branches—such as opening an account, transferring money, making
payments, etc.—is known as digital banking.
With the introduction of the BHIM by the National Payments Corporation of India
(NPCI) and the UPI (Unified Payment Interface) System in 2016, the Government of
India (GOI) ignited the digital payments revolution that gave rise to mobile banking.
A number of fintech firms in the country have advanced digital banking by
collaborating with traditional banks to offer a wide range of financial services,
capitalising on technological advancements.
Niti Aayog proposed in 2021 to establish full-stack "digital banks," which would only
provide services online and not through physical branches. It is anticipated that this
will transform digital banking in India.

❖ Small Finance Banks in India
The RBI approved small finance banks in 2016 to increase financial inclusion for
people who are not served by traditional banks. Small businesses, marginal farmers,
micro and small industries, and low-cost operations can obtain credit and savings
options from this specialised category of banks through the use of contemporary
technology.

Market Size
Together with cooperative credit institutions, the Indian banking system is made up
of 12 public sector banks, 22 private sector banks, 46 foreign banks, 56 regional
rural banks, 1485 urban cooperative banks, and 96,000 rural cooperative banks.
15,30,287 micro ATMs were operating in India as of October 2023. In addition, there
are 93,771 off-site ATMs and Cash Recycling Machines (CRMs) in addition to
1,25,969 on-site ATMs.
In comparison to 1,486 in FY22 and 2,815 in FY21, banks installed 2,796 ATMs in
the first four months of FY23. In rural India, all new bank account openings are done
digitally. According to BCG, by 2026, 65 percent of payments will be made digitally.
The combined assets of the public and private banking sectors as of December 1st,
2023, were US$ 1688.15 billion and US$ 1017.26 billion, respectively. Up until
December 1st, 2023, 58.32 percent of all banking assets were made up of assets
from public sector banks (including public, private sector and foreign banks).
In 2023, public sector banks generated more than 57.48 percent of interest income
(till December 1st, 2023). In 2023, public banks' interest income totaled $102.51

billion (till December 1st, 2023). Interest income in the private banking sector
reached US$ 70.07 billion in 2023 (up until December 1st, 2023).
Over the course of ten years, the digital lending market in India grew at a CAGR of
39.5 percent. By 2030, it is expected that the digital consumer lending market in
India will have grown to over US$ 720 billion, or roughly 55% of the US$ 1.3 trillion
total digital lending market opportunity in the nation.
As of December 1st, 2023, deposits at all scheduled banks increased by a staggering
Rs. 1.75 lakh crore (US$ 2,110.87 billion), according to the Reserve Bank of India's
Scheduled Banks' Statement.
As per the RBI's statement on Sectoral Deployment of Bank Credit, non-food bank
credit grew by 17.6 percent in November 2022 compared to 7.1 percent in the same
month last year. This growth was attributed to strong credit demand from various
segments, including services, industry, personal, and agriculture and related
activities.

Statistics
▪ Thanks to robust economic growth, rising disposable incomes, increased level of
consumerism, and easier access to credit, the Indian banking sector has been
expanding.
▪ More than 486 million bank accounts have been opened under the GoI Pradhan
Mantri Jan Dhan Yojana, with beneficiary accounts holding deposits of more than
US$ 24.2 billion. Up until August 2023, 50.18 crore beneficiaries had banked
accounts.
▪ There is now more demand for retail and corporate loans. Credit growth has been
driven by the services, real estate, consumer durables, and agriculture-related
industries.
▪ India is among the Fintech markets with the fastest rate of growth worldwide. In
India, there are currently over 2,000 Financial Technology (FinTech) companies that
have received DPIIT recognition, and the number is growing quickly.
With 65% of its population under 35, India's youthful population is expected to
propel the country from its current position as the largest consumption market to
the third position in the consumer economy by 2030.
By 2050, India is expected to have the third-largest domestic banking sector.
▪ Bank credit increased by 18.1%, indicating a post-pandemic rebound; private
new banks are still gaining market share.

▪ Non-food bank credit grew by 15.3 percent in December 2022 on a year-over-
year (y-o-y) basis, up from 9.4 percent in the previous year.
▪ Because of the government's consistent efforts to advance banking technology
and encourage expansion in underbanked and non-metropolitan areas, access to the
banking system has also improved over time.
▪ Rising rates of savings and growth in savings, along with rising disposable
income, have helped Indian banking.
There are more than 486 million Jan Dhan Yojana Bank accounts. In July 22nd, Jan
Dhan Deposits experienced a YoY growth of 20%. Beneficiary accounts have
deposits totaling over ~US$ 24.2 billion.
▪ The RBI reports that after two years of losses, lenders recorded an overall profit
in FY20, indicating an improvement in the performance of the Indian banking sector.

Government Initiatives & Budget Highlights
• Pradhan Mantri Jan Dhan Yojana: The "Jan Dhan Yojna," the largest financial
inclusion programme in the world, has assisted 486+ million beneficiaries—
265+ million of whom are women—in opening new bank accounts.
• Plan for Foreign Banks to Establish Wholly Owned Subsidiaries (WOS) in India:
In order to encourage foreign investments in the industry, the RBI released
guidelines in 2013 for foreign banks operating in India to set up WOS.
• Loans for Kisan Credit Card (KCC) to be made available entirely digitally and
without difficulty
• NBFCs and other non-banking entities using Aadhaar e-KYC authentication: It is
now possible for all NBFCs, payment system providers, and payment system
participants to get an Aadhaar Authentication License (KUA/sub-KUA).
• Establishment of Digital Banking units: 75 DBUs were announced in 75 districts
nationwide in 2022 to mark the 75th anniversary of India's independence.
• GIFT-IFSC: Authorizing acquisition financing through IFSC Banking Units of
overseas banks; forming an EXIM Bank subsidiary for trade re-financing
• The banks will relinquish 15 non-performing loans (NPLs) valued at Rs. 50,000
crore (US$ 6.70 billion) to the National Asset reconstruction company (NARCL).

• Azadi Ka Amrit Mahotsav Mahila Samman Bachat Patra: Mahila Samman Savings
Certificate is a one-time, new small savings plan that will be offered for two
years, ending in March 2025.

Growth Drivers
❖ Digitization of Rural Areas
Rural India is still the main driver of digital adoption, with 333 million internet
users and an 8% YoY growth in this sector (37 percent of rural population). In India,
four fifths of all data consumption occurs in rural areas. Currently, there are seven
rural internet users for every ten urban users.
❖ Total Number of Users of Smartphones
India is the country with the second-largest Internet user base and the second-
highest number of smartphone users worldwide.
❖ Big market for consumption
With 65% of its population under 35, India's youthful population is expected to
propel the country's economy to become the third largest in the world by 2030.
❖ Digital Acceleration
Mobile banking Neo-banking, internet banking, and the growth of digital products
and solutions supported by the Indian government and private sectors: as of 2021,
93% of digital payments were made via mobile devices, and there are more than 1
billion cards in use.

Investments/Developments
Key investments and developments in India’s banking industry include:
• The Bancassurance Partnership was established in December 2023 by
Ujjivan Small Finance Bank and ICICI Prudential Life Insurance.
• The acquisition of Fincare Small Finance Bank in an all-share agreement and
subsequent merger with AU Small Finance Bank were announced in October
2023.
• The National Payments Corporation of India (NPCI) reported that up until
August 30, 2023, 10.241 billion UPI transactions had been made.
• Hitachi Payment Services and NPCI jointly introduced India's first-ever UPI-
ATM in September 2023.
• Mahindra & Mahindra purchases a minority interest in RBL Bank in July
2023.
• State Bank of India will pay US$ 85.25 million to acquire SBI Capital's entire
stake in SBICAP Ventures in July 2023. (Rs. 708 crore).
• State Bank of India will buy SBI Capital Markets' whole 20% interest in SBI
Pension Funds in June 2023.
• HDFC Bank plans to purchase at least 20% of HDFC Investments' Griha Pte
subsidiary in April 2023.

Industry Trends & Opportunities
Technological innovations
• Not only do these banks now offer technology-oriented business models, but
nearly all banks are using technology to enhance and broaden the provision
of financial services and products.
• The concept of digitalizing agri-finance was developed in collaboration
between the Reserve Bank and the Reserve Bank Innovation Hub (RBIH).
This will make it possible for Kisan Credit Card (KCC) loans to be delivered
completely digitally and easily.
• The RBI initiated a pilot project on digital currency for central banks in
November of 2022. (CBDC).
• More than 1 billion cards are in use, and 93% of digital payments (by
volume) are made via mobile devices.
• The Union Budget 2023–24 states that in 2022, UPI processed US$ 900
million (about Rs. 7,400 crore) in digital payments, totaling US$ 1.5 trillion
(about Rs. 126 lakh crore). By August 30th, 2023, 10.241 billion UPI
transactions had occurred.

Better techniques for risk management
• Adopting an integrated approach to risk management is becoming
increasingly important to Indian banks.
• In October 2022, a draught MD offering a consolidated and updated
framework for IT governance and risk management for regulated entities
(REs) was posted on the Reserve Bank website for public feedback.
• Notably, public sector banks (PSBs) struggled to achieve greater compliance
with the audit, risk management, and board effectiveness dimensions as of
August 2022.
• The KYC procedure will be expedited in Union Budget 2023 by employing a
"risk-based" strategy as opposed to a "one size fits all" methodology.
Focus on Jan Dhan Yojana
• Through a variety of programmes, the government provides direct benefit
transfers (DBT) to PMJDY account holders.
• Since the program's founding, over 486 million beneficiaries—or 48.87
crore—have deposited money into banks under PMJDY, totaling US$ 24.2
billion (Rs. 1,97,936.27 crore). Up until August 2023, a total of 50.18 crore
beneficiaries have been banked.

• Ex-gratia were credited to more than 20 crore women's PMJDY accounts
within ten days of the Covid-19-related nationwide lockdown.
• As of August 10, 2022, PMJDY Accounts have increased threefold from 14.72
crore in March 2015 to 46.25 crore.
• In addition to rescuing them from the grasp of predatory money lenders, it
gives the impoverished a way to transfer their savings into the official
banking system and send money back to their families in rural areas.
Consolidation
• In an effort to reap bigger rewards like improved synergy, cost savings from
economies of scale, organisational efficiency, and risk diversification, banks
are consolidating more and more.
• This year, Indian banks soared after two years of consolidation, propelled by
declining non-performing assets, increased credit expansion, and increasing
digitization.
Focus on financial inclusion
• The expansion of financial services has become more competitive, inclusive,
productive, efficient, and of high quality thanks to technological
advancements, particularly in the field of digital lending.

• The National Strategy for Financial Inclusion (NSFI) 2019–24 lays out the
main goals and vision of India's financial inclusion policies, emphasising the
development of digital financial inclusion, the advancement of financial
literacy, and the bolstering of the nation's grievance redressal system.
Know Your Customer
• ▪ The RBI enforced the Know Your Customer (KYC) Standards, requiring all
banks to establish a thorough policy framework to prevent money
laundering.
• ▪ In order to open an account or make any kind of investment, including
mutual funds, the KYC policy is now required.
Wide usability of RTGS, NEFT and IMPS
• The Securities Exchange Board of India (SEBI) has added the NEFT and RTGS
payment systems to the list of methods that companies can currently use to
pay dividends or other cash benefits to their investors and shareholders. Also
it has constant accessibility
• There have been even more transactions made via IMPS.

RBI Retail Direct Scheme
• The RBI Retail Direct scheme is a one-stop shop for helping individual
investors invest in government securities.
• It will be possible for individual retail investors to open and maintain a
"Retail Direct Gilt Account" (RDG Account) with the RBI.
• The RBI's trading system, "NDS OM," allows the individual to access the
secondary market through this scheme as well. On the due dates, the investor
will automatically receive any interest paid or maturity proceeds into the
bank account that is linked to him.
• It is suggested that the RBI Retail Direct Portal offer the following extra
services to Retail Direct Investors:
▪ Nomination
▪ Gifting
▪ Pledge/Lien/Transfer

An overview of the digital lending market
• With approximately 82% of all online lenders globally, India is the largest
market in the world for mobile lending apps based on Android.
• In 2019, the Indian digital lending market was valued at US$ 110 billion. The
digital lending market is expected to reach a valuation of approximately US$
350 billion by 2023. The majority of the market was supplied by NBFCs and
fintech companies.
• Over a ten-year period, the digital lending market in India grew at a
compound annual growth rate (CAGR) of 39.5 percent.
• The market for digital loans is expected to reach US$ 800 billion by 2030, up
from US$ 90 billion in 2020.
• By 2030, digital lending is expected to comprise 60% of the entire fintech
market in India.
• The rise in digital lending will be fueled by factors such as the expansion of
formal finance, rising per capita income, and increased internet penetration.
• Digi Dhan Mela: The Uttar Pradesh government is promoting digital
payments through an awareness campaign being held throughout the state
as a Digi Dhan Mela, in line with the vision of Digital India. The primary aim
of this occasion is to raise public awareness regarding digital payments.

• The Indian government is working tirelessly to position the country as a
global leader in digital payment systems and to rank among the world's most
efficient payment markets.

Government Schemes
Pradhan Mantri Jan Dhan Yojana (PMJDY)
With the help of this programme, all households in the nation will have universal
access to banking services and complete financial inclusion.
This allows someone who does not currently have a savings account to open one
without having to meet any minimum balance requirements. They can also open a
small account if they self-certify that they do not possess any of the legally required
documents.
Pradhan Mantri Suraksha Bima Yojana (PMSBY)
Anyone between the ages of 18 and 70 who has a bank account and gives
permission to join the scheme or enable auto-debit by May 31 at the latest for the
coverage period of June 1 through May 31 on an annual renewal basis is eligible to
participate in the scheme.
Atal Pension Yojana (APY)
All holders of post office or savings bank accounts between the ages of 18 and 40 are
eligible for the APY, with different contributions depending on the chosen pension
amount. At the age of sixty, subscribers would receive a guaranteed minimum
monthly pension of either Rs. 1,000, Rs. 2,000, Rs. 3,000, Rs. 4,000, or Rs. 5,000.

The total number of participants in the Atal Pension Yojana surpassed 5.20 crore as
of March 31, 2023.
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
Anyone with a bank account who is between the ages of 18 and 50 who agrees to
participate in or enable auto-debit is eligible for the PMJJBY. The primary KYC for
the bank account is Aadhar. The Rs. 2 lakh life insurance is renewable and valid for a
full year, from June 1 to May 31.
Stand Up India Scheme
Under the scheme, bank loans ranging from Rs. 10 lakh (US$ 12,164) to Rs. 1 crore
(US$ 121,642) can be obtained for the establishment of greenfield businesses by at
least one borrower from a Scheduled Caste or Scheduled Tribe and one borrower
who is a woman per bank branch.
MUDRA
PMMY was introduced to give micro and small business units up to Rs. 10 lakh in
institutional financing. Shishu loans up to Rs.50,000, Kishore loans between
Rs.50,000 and Rs.5 lakh, and Tarun loans between Rs.5 lakh and Rs.10 lakh are
assigned under PMMY.

Government Agencies
• Indian Banks Association
• Institute for Development and Research in Banking Technology
• Reserve Bank of India

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Banking Industry in India

Evolution of the Indian banking sector .............................................................................. 4

Types of Banks in India............................................................................................................ 9

Market Size ................................................................................................................................ 16

Government Initiatives & Budget Highlights.................................................................. 20

Growth Drivers ......................................................................................................................... 22

Industry Trends & Opportunities ....................................................................................... 24

An overview of the digital lending market ...................................................................... 29

Government Schemes ............................................................................................................. 31

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improvement in asset quality.

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every village within a 5-kilometer radius in 25 states and 7 Union Territories,

accounting for 99.94 percent of all villages.

number is growing quickly.

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Evolution of the Indian banking sector

India's banking history began prior to the country's 1947 declaration of

independence. Three stages can be distinguished in the development of the banking

Phase I: From 1770 to 1969 was the Early Phase.

Phase II: From 1969 to 1991, there was a phase of nationalisation.

Banking Sector Reforms phase or Liberalization

Pre Independence Period (1786-1947)

shut down in 1832.

only a small number of them were able to endure.

The General Bank of India (1786-1791)

Oudh Commercial Bank (1881-1958)

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Bank of Bengal (1809)

Bank of Bombay (1840)

Bank of Madras (1843)

Madras. Subsequently, in 1921, these three banks amalgamated to form the

"Imperial Bank of India."

Allahabad Bank 1865

Punjab National Bank 1894

Bank of India 1906

Central Bank of India 1911

Canara Bank 1906

Bank of Baroda 1908

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Post Independence Period (1947-1991)

money lenders for financial assistance.

At the time, the government decided to nationalise the banks in an attempt to

over 50 crores in national deposits.

Liberalisation Period (1991-Till Date)

continuing stage of the development of the banking industry is extremely important.

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These banks included:

Global Trust Bank (now Oriental bank of Commerce)

Development Credit Bank

Bandhan (2015) joined the league in a short period of time.

The other measures taken include:

• Opening of branches of various foreign banks in India

• There could be no more bank nationalisation.

the public and private sectors equally.

• Any foreign bank could form partnerships with banks in India.