Banking in India

As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalized and well-regulated. The financial and economic conditions in the country are far superior to any other country in the world. Credit, market and liquidity risk studies suggest that Indian banks are generally resilient and have withstood the global downturn well.

History

The origin of western type commercial Banking in India dates back to the 18th century. The story of banking starts from Bank of Hindustan established in 1770 and it was first bank at Calcutta under European management. It was liquidated in 1830-32.
From Bank of Hindustan in 1770, the evolution of banking in India can be divided into three different periods as follows: Phase I: Early phase of primitive Indian banks to Nationalization of Banks in 1969 Phase II: From Nationalization of India banks in 1969 up to advent of liberalization and banking reforms in 1991 Phase III: From Indian Financial and Banking Sector Reforms 1991 onward In 1786 General Bank of India was set up. Since Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, it became a banking center. Three Presidency banks were set up under charters from the British East India Company- Bank of Calcutta, Bank of Bombay and the Bank of Madras. These worked as quasi central banks in India for many years. The Bank of Calcutta established in 1806 immediately became Bank of Bengal. In 1921 these 3 banks merged with each other and Imperial Bank of India got birth. Imperial Bank of India was later renamed in 1955 as the State Bank of India. Thus, State bank of India is the oldest Bank of India. In 1839, there was a fruitless effort by Indian merchants to establish a Bank called Union Bank. It failed within a decade. Next came Allahabad Bank which was established in 1865 and working even today. The oldest Public Sector Bank in India having branches all over India and serving the customers for the last 145 years is Allahabad Bank. Allahabad bank is also known as one of India’s Oldest Joint Stock Bank. However, the Oldest Joint Stock bank of India was Bank of Upper India established in 1863 and failed in 1913. The first Bank of India with Limited Liability to be managed by Indian Board was Oudh Commercial Bank. It was established in 1881 at Faizabad. This bank failed in 1958. The first bank purely managed by Indians was Punjab National Bank, established in Lahore in 1895. The Punjab national Bank has not only survived till date but also is one of the largest banks in India. However, the first Indian commercial bank which was wholly owned and managed by Indians was Central Bank of India which was established in 1911. So, Central Bank of India is called India’s First Truly Swadeshi bank.

Some facts

  • The first bank established in India was Bank of Hindustan, which was started in 1770. Second was The General Bank of India, which started in 1786.
  • The oldest bank still in existence in India is the State Bank of India. It was originated in the Bank of Calcutta in June 1806.
  • Bank of Bengal, Bank of Bombay and Bank of Madras, these three banks merged in 1921 to form the Imperial Bank of India, which was converted as State Bank of India in 1955.
  • The first Indian bank to have been started solely with Indian capital investment is Punjab National Bank.
  • The first Indian bank to open overseas branch is Bank of India. It established a branch in London in 1946.
  • The oldest existing Public Sector Bank in India is Allahabad Bank.
  • The first Indian commercial bank owned and managed by Indians is Central Bank of India.
  • Lala Lajpat Rai was the founder of Punjab National Bank.
  • Union Bank of India (UCO) bank was inaugurated by Mahatma Gandhi in 1919.
  • The Reserve Bank of India was instituted in 1935.
  • The first bank in India with an ISO Certification is Canara Bank.
  • The first time banks were nationalized in India was on 19 July, 1969.
  • Osborne Smith was the first governor of the Reserve Bank.
  • CD Desmukh was the first Indian to be the governor of Reserve Bank.
  • Savings account system in India was started by Presidency Bank, 1833.
  • Bengal Bank, established in 1784, was the first bank to introduce cheque system.
  • ICICI Bank was the first Indian bank to provide internet banking facility.
  • First bank to introduce ATM in India was HSBC in 1987, Mumbai.
  • Central Bank of India was the first public bank to introduce Credit card.
  • ICICI is the first bank to provide mobile ATM.
  • Bank of Baroda has the maximum number of overseas branches.
  • When it comes to the total number of maximum branches in the world, State Bank of India holds 2nd position.
  • First Bank to introduce Mutual Fund : State Bank of India
  • First Foreign Bank in India : Comptoire d’Escompte de Paris of France in 1860
  • First Joint Stock Bank of British India : State Bank of India
  • First Joint Stock Bank of India : Allahabad Bank
  • First national bank that is merged with Punjab National Bank    : New Bank of India in 1993
  • First Indian bank to open branch outside India in London in 1946   : Bank of India
  • First Indian Bank started with Indian capital /indigenous Bank of India   : Punjab National Bank
  • First Regional Rural Bank name Prathama Grameen Bank Was started by: Syndicate Bank
  • Which 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 Reconstruction and Development (IBRD) is known as – World Bank
  • India’s 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 rates, Loan Rates etc. are decided by individual banks
  • The bank which has launched Mobile Bank Accounts in association with Vodafone’s m –paisa – HDFC Bank
  • Minimum money transfer limit through RTGS: 2 Lakhs
  • Maximum money transfer limit through RTGS: No Limit
  • Minimum & Maximum money transfer limit through NEFT: No Limit
  • 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. London in 1946: Bank of India
  • First RRB named Prathama Grameen Bank was started by: Syndicate Bank
  • Study about Financial and Banking sector reforms in India here
  • Bank of Baroda has the maximum number of overseas branches
  • SBI holds the second position with maximum number of overseas branches
  • Premium credit cards exclusively for women launched recently by – HDFC bank
  • Private Sector Bank that recently launched a product of Personal loan called “SWIFT” – HDFC
  • The bank which approved loan of $500mn to help India improve Rail services – Asian Development Bank
  • FDI limit for new banks – 49%
  • FDI limit for private banks: 74%

Leave a Reply