In this post I will only discuss about when the banking terminology came into existence in India.
I will talk about RBI, nationalization, foundation and expansion in length in the upcoming posts.
The first bank of India, The General Bank of India, was set up in 1786.
Bank of Hindustan was set up in 1790. Then the East India Company established three banks.
Those were
- Bank of Bengal (1809)
- Bank of Bombay (1840) and
- Bank of Madras (1843)
As independent units and called it Presidency Banks.
These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders which took up the role of a commercial bank, a bankers' bank and a banker to the Government..
Allahabad Bank was established in 1865 and first time exclusively by Indians and then Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore.
Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up.
Reserve Bank of India came into existence in 1935. Reserve bank of India is the central bank of the country.
Coming back to the point, this phase was actually the development era of Indian banking. But the banks were facing so many problems regarding working methodology, functioning and periodic failures of the banks. To overcome with the failure, government of India came up with the Banking Companies Act 1949, which was later changed into Banking Regulation Act, 1949 as per amending Act of 1965 (Act No. 23 of 1965).
And on 1 Jan 1949 Reserve Bank of India nationalized.
The Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the central banking authority. From here RBI became Banker’s Bank or the Centralized bank.
In 1954 the All India Rural Credit Survey Committee submitted its report recommending the creation of a strong integrated, state-sponsored, state-partnered commercial banking institution with an effective machinery of branches spread all over the country. The recommendations of this committee led to the establishment of the first Public Sector Bank in the name of State Bank of India on July 01, 1955 by acquiring the substantial part of share capital by RBI, of the then Imperial Bank of India. Similarly, during 1956-59, as a result of reorganization of princely states, the associate banks came into existence of public sector banking.
