Banking In India

• Modern commercial banking in India started with setting up of the First presidency bank, Bank of Bengal, in Kolkata in 1806
• Two other presidency banks were set up in
• Bank of Bombay - 1840
• Bank of Madras - 1843
• They were private shareholders bank
• The company which also contributed to each of their share capital - East India Company
• The bulk of share capital came from private shareholders of - Europe
• These banks were given monopoly of government banking
• They were given right of note issue after 1823
• The right was taken over by govt in 1862
• Presidency banks merged to form the Imperial Bank of India(IBI) in 1921
• The Allahabad Bank was established in 1865
• Punjab National Bank was established in 1894
• Under the pressure from the Swadeshi Movement some large banks of today were established between 1906 and 1913
• Bank of India
• Central Bank of India
• Bank of Baroda
• Canara Bank
• Indian Bank
• Bank of Mysore
• According to parliamentary act IBI was acquired by RBI
• RBI renamed IBI as State Bank of India in 1955
• Eight banks were converted as associate banks of SBI in 1958
• State Bank of Bikaner
• State Bank of Jaipur
• State Bank of Hyderabad
• State Bank of Indore
• State Bank of Mysore
• State Bank of Saurashtra
• State Bank of Patiala
• State Bank of Travancore
• State Bank of Bikaner & State Bank of Jaipur were merged to form State Bank of Bikaner and Jaipur(SBBJ) in 1963
• State Bank of Saurashtra merged with SBI in 2008
• State Bank of Indore merged with SBI in 2010
• The total no of associates of SBI currently working is 5
• State Bank of Bikaner and Jaipur
• State Bank of Hyderabad
• State Bank of Mysore
• State Bank of Patiala
• State Bank of Travancore
• 14 large commercial banks with reserves more than Rs.50 Cr each were nationalised on 19 July 1969
• Central Bank of India
• Bank of India
• Punjab National Bank
• Canara Bank
• United Commercial Bank
• Syndicate Bank
• Bank of Baroda
• United Bank of India
• Dena Bank
• Allahabad Bank
• Indian Bank
• Indian Overseas Bank
• Bank of Maharashtra
• Union Bank of India
• 6 Private sector banks with reserves more than Rs. 200 Cr each were nationalised on 15 April 1980
• Andhra Bank
• Punjab and Sindh Bank
• New Bank of India
• Vijaya Bank
• Corporation Bank
• Oriental Bank of Commerce
• The New Bank of India merged with Punjab National Bank on 14 September 1993
• Total no of nationalised banks reduced to 19 from 20

• A hig-level Committee on Financial System (CFS) under the chairmanship of M Narasimham to examine all aspects relating to the structure, organisation, functions and procedures of the financial system was set up on - 14 August 1991
• A comprehensive reform of banking system was introduced in 1992-93 based on recommendations of the committee
• In 1992 Govt of India appointed a high-level committee chaired by M Narasimham to review the record of implementation of reforms and chart the reforms necessary in years ahead
• The committee submitted its report in April 1998

• The first central bank in the world was established in Sweden in 1668
• Effective central banking came into being with establishment of Bank of England in 1694
• Commission which recommended establishment of RBI - Hilton Commission
• RBI Act was passed in - 1934
• RBI was established on - 1 April 1935
• Initially, it was constituted as a private shareholders' bank with a fully paid-up capital of Rs. 5 Cr
• RBI was nationalised on - 1 January 1949
• Executive head of the bank - Governor
• Governor is assisted by - Deputy Governors
• Head Quarters - Mumbai
• With a view of having co-ordinated regulation of Indian banking, Indian Banking Act (IBA) was passed in March 1949
• The act's powers cover all important aspects of banking from banks' licensing to their liquidation