India is one of the world’s biggest democracy, a democracy of 1.4 Billion. India’s economic progress had a huge impact on the Indian banking industry. With the development of technology and taking into account people’s requirements, significant changes in the management and banking system have been seen over time.
The History of Banking in India dates back to before India got independence in 1947. As per the research, the earlier phase of Indian banking is from 1770’s.
The banking sector development can be divided into four phases:
Phase I: Pre-Independence Period 1770 to 1947
Phase II: Pre-Nationalisation Period 1947 to 1969
Phase III: Post-Nationalisation Period 1969-1991
Phase IV: Liberalisation or the Banking Sector Reforms Phase which began in 1991 and continues to flourish till date
Here is a little study on the Indian banking system
Phase I: Pre-Independence Period 1770 to 1947
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Following the path of Bank of Hindustan, various other banks were established in India. 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)
During the British rule in India, The East India Company had established three banks: Bank of Bengal, Bank of Bombay and Bank of Madras and called them the Presidential Banks. These three banks were later merged into one single bank in 1921, which was called the “Imperial Bank of India.”
The Imperial Bank of India was later nationalised in 1955 and was named The State Bank of India, which is currently the largest Public sector Bank.
Given below is a list of other banks which were established during the Pre-Independence period:
| Pre-Indepence Banks in India | |
| Bank Name | Year of Establishment |
| Allahabad Bank | 1865 |
| Punjab National Bank | 1894 |
| Bank of India | 1906 |
| Central Bank of India | 1911 |
| Canara Bank | 1906 |
| Bank of Baroda | 1908 |
Phase II: Pre-Nationalisation Period 1947 to 1969
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Phase III: Post-Nationalisation Period 1969-1991
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At the time when India got independence, all the major banks of the country were led privately which was a cause of concern as the people belonging to rural areas were still dependent on money lenders for financial assistance.
With an aim to solve this problem, the then Government decided to nationalise the Banks. These banks were nationalised under the Banking Regulation Act, 1949. Whereas, the Reserve Bank of India was nationalised in 1949.
Following it was the formation of State Bank of India in 1955 and the other 14 banks were nationalised between the time duration of 1969 to 1991. These were the banks whose national deposits were more than 50 crores.
Given below is the list of these 14 Banks nationalised in 1969:
- Allahabad Bank
- Bank of India
- Bank of Baroda
- Bank of Maharashtra
- Central Bank of India
- Canara Bank
- Dena Bank
- Indian Overseas Bank
- Indian Bank
- Punjab National Bank
- Syndicate Bank
- Union Bank of India
- United Bank
- UCO Bank
In the year 1980, another 6 banks were nationalised, taking the number to 20 banks. These banks included:
- Andhra Bank
- Corporation Bank
- New Bank of India
- Oriental Bank of Comm.
- Punjab & Sind Bank
- Vijaya Bank
Apart from the above mentioned 20 banks, there were seven subsidiaries of SBI which were nationalised in 1959:
- State Bank of Patiala
- State Bank of Hyderabad
- State Bank of Bikaner & Jaipur
- State Bank of Mysore
- State Bank of Travancore
- State Bank of Saurashtra
- State Bank of Indore
Phase IV: Liberalisation or the Banking Sector Reforms Phase which began in 1991 – till date
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The biggest development was the introduction of Private sector banks in India. RBI gave license to 10 Private sector banks to establish themselves in the country. These banks included:
- Global Trust Bank
- ICICI Bank
- HDFC Bank
- Axis Bank
- Bank of Punjab
- IndusInd Bank
- Centurion Bank
- IDBI Bank
- Times Bank
- Development Credit Bank
PS: This article will be updated regularly. If you have any suggestions, feedback, or appreciation kindly mail it to the original author via email at vinotgeorgec@gmail.com.
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