Banking Awareness:-
- The significance of banking in our day to day life is being felt increasingly. What are the institutions, so inevitable in the present day set up? How do they transact? How did the concept emerge?
- In this article we’ll, explore the birth of this flourishing industry.
History of Indian Banking System:-
India has a long history of financial intermediation. A type of business organization recognizable as managing agency houses took form in period from 1834 to 1847. Earliest of these was Hindustan Bank, established by one of the agency houses in Calcutta in 1770. Banking in India originated in the last decades of the 18th century.
S. No
|
Year
|
Bank
|
1 | 1786 | The General Bank of India |
2 | 1790 | Bank of Hindustan |
But both are not in existence now.
- The East India Company established,
S. no
|
Year
|
Bank
|
1 | 1809 | Bank of Bengal/Calcutta |
2 | 1840 | Bank of Bombay |
3 | 1843 | Bank of Madras |
These three individual units were called as Presidency Banks.
- The other banks during this period were,
S. no
|
Year
|
Bank
|
1 | 1865 | Allahabad Bank |
2 | 1894 | Punjab National Bank |
3 | Between 1906 and 1913 | Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, Indian Bank and Bank of Mysore |
- In 1921, all presidency banks were amalgamated to form the Imperial Bank of India, was run by European shareholders.
- The Reserve Bank of India (RBI) was established on 1st April 1935, under the Banking Regulation Act 1934.
- After independence, the Government of India came up with the Banking Companies Act, 1949 later changed to Banking Regulation Act 1949 as per amending Act of 1965.
- RBI was vested with extensive powers for the supervision of banking in India as a Central Banking Authority.
- In 1955, Imperial Bank of India was nationalized and given the name “State Bank of India” (SBI), to act as a principal agent of RBI and it was established under State Bank of India Act, 1955.
Seven subsidiary of SBI was nationalized in 1959.
SEVEN SUBSIDIARY AND MERGING
- State Bank of Patiala
- State Bank of Hyderabad
- State Bank of Travancore
- State Bank of Bikaner and Jaipur
- State Bank of Mysore
- State Bank of Saurashtra
- State Bank of Indore
State Bank of Saurashtra in 2008 and State Bank of Indore in 2010, merged with SBI.
- On the suggestions of Narasimhan Committee, the Banking Regulation Act was amended in 1993 and thus the gates for new private banks were opened.
- In 1971 Credit Guarantee Corporation was formed
- In 1975 Regional Rural Banks (RRBs) were formed.
- By the end of 1974, three separate institutional arrangements Commercial Banks, Cooperative Banks, RRBs were emerged.
- Establishment of National Bank for Agriculture and Rural Development (NABARD) in 1982 for cooperative credit.
- Apart from NABARD,
S. no
|
Bank
|
Purpose
|
1 | EXIM(Export-Import Bank of India) | Agricultural Sector |
2 | SIDBI(Small Industries Development Bank of India) | Credit needs of small industries |
3 | NHB(National Housing Board) | Housing Board |
- In 1988 Securities and Exchange Board of India was established to cater the security market in India.
- Since 1991, the Indian financial system has undergone radical transformation leads to the development of Non Banking Financial Companies (NBFCs) and Development Financial Institutions (DIFs).
- Competition has been infused into the financial system by licensing new private banks since 1993.
- The minimum capital of new Private Sector Banks should be Rs.300 crore.
These banks are
PRIVATE SECTOR BANKS
- Axis Bank Ltd
- Development Credit Bank Ltd
- HDFC Bank Ltd
- ICICI Bank Ltd
- Industrial Bank Ltd
- Kotak Mahindra Bank Ltd
- Yes Bank Ltd
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