History of Banking in India

India’s economic development is based on the banking industry. With the development of technology and taking into account people’s requirements, significant changes in the management and banking system have been observed over time.

Prior to Independence (1786-1947)

The “Bank of Hindustan,” which was found in 1770 and had its headquarters in Calcutta, the then-capital of India, was the country’s first bank. However, this bank did not succeed and was forced to close its doors in 1832.

Only a few of the more than 600 banks that were registered in the nation before independence were able to survive.

Several other banks were created in India after the Bank of Hindustan. As follows:

The Indian General Bank (1786-1791)

Commercial Bank of Oudh (1881-1958)

Bengal Bank (1809)

Bombay Bank (1840)

BMO Bank of India (1843)

The Bank of Bengal, the Bank of Bombay, and the Bank of Madras were established by The East India Company and were known as the Presidential Banks while the British Empire ruled India. Later, in 1921, these three banks were combined into a single institution known as the “Imperial Bank of India.”

Later nationalised in 1955, The Imperial Bank of India was renamed The State Bank of India and is now the biggest Public sector Bank.

Consequences of Nationalisation

The Government decided to nationalise the banks for a number of reasons. The effects of nationalising banks in India are as follows:

• This resulted in a rise in funds, which improved the nation’s economic situation.
• Improved Effectiveness
• Aided in developing the nation’s agricultural and rural sectors.
• It provided the people with significant work opportunities.
• The government utilised bank profits for the benefit of the populace.
• As the level of competition dropped, work productivity rose.
• Major changes in India’s banking industry and the development of the banking sector occurred during this post-Independence period.

Liberalisation amount (1991-Till Date)

Once the banks were established within the country, regular observation and rules got to be followed to continue the profits provided by the banking sector. The last part or the continued part of the banking sector development plays a massively vital role.

To provide stability and profit to the Nationalised Public sector Banks, the govt set to line up a committee underneath the leadership of Shri. M Narasimham to manage the assorted reforms within the Indian banking system.

The biggest development was the introduction of personal sector banks in Asian nations. tally gave license to ten non-public sector banks to determine themselves within the country. These banks included:

• Global Trust Bank
• ICICI Bank
• HDFC Bank
• Axis Bank
• Bank of geographical region
• IndusInd Bank
• Centurion Bank
• IDBI Bank
• Times Bank
• Development Credit Bank

The other measures taken include:

• Setting up of branches of the assorted Foreign Banks in Asian nation
• No a lot of nationalisation of Banks might be done
• The committee proclaimed that tally and Government would treat each public and personal sector banks equally
• Any Foreign Bank might begin joint ventures with Indian Banks
• Payments banks were introduced with the event within the field of banking and technology
• Small Finance Banks were allowed to line their branches across Asian nation
• A major a part of Indian banking rapt on-line with web banking and apps accessible for fund transfer
• Thus, the history of banking in Asian nations shows that with time and also the desires of individuals, major developments are led within the banking sector with an associate degree aim to prosper it.

Conclusion

Before 1947, when India attained independence, banking in India already existed. Today, questions on this important subject are frequently asked in government exams. We will go into great detail on the development of the Indian banking industry in this essay.