Tuesday, 1 April 2014

History of Indian Banking

The General Bank of India was the first joint stock bank to be established in the year 1786. The others which followed were the Bank of Hindustan and the Bengal Bank. The Bank of Hindustan continued till 1906, while the other two failed in the meantime.

In the first half of the 19th century the East India Company established three banks,
1) The Bank of Bengal in 1809.
2) The Bank of Bombay in 1840.
3) The Bank of Madras in 1843.

Initially these three banks were known as presidency banks and were independent units. These three banks were amalgamated to form the Imperial Bank of India on 27th Jan 1921. With the passing of the SBI Act in 1955, the undertaking of Imperial Bank of India was taken over by the newly constituted SBI.

The Reserve Bank of India was established on April 1, 1935 on the recommendations of Hilton Young Commission as per RBI act 1934 as a private shareholder bank. It was nationalized on January 1, 1949.

On July 19th 1969, 14 major banks of the country were nationalized and in 15th April 1980 six more commercial private sector banks were nationalized.

After the second phase of financial sector reforms and liberalization of the sector foreign banks made their appearance, after the guidelines permitting them were issued in January 1993.

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