History of Banking System in India

History of Banking System in India

Definition

A bank is a financial institution that accepts different forms of deposits, lends them to prospective borrowers, and allows the depositors to withdraw their money from their accounts by cheque is a bank.

History of the Banking System

The first bank in India was the Bank of Hindustan established in 1770 by Alexander and Company Limited, (founded by traders and merchants from Scotland) which ceased to operate in 1832.

History of State Bank of India

  • 1806 – Bank of Calcutta (2 June 1806)
  • 1809 – later name changed to Bank of Bengal
  • 1840 – Bank of Bombay – (15 Apr 1840)
  • 1843 – Bank of Madras – (1 July 1843)
  • 1921 – Bank of Bengal, Bank of Bombay, and Bank of Madras these three banks were merged into the Imperial Bank of India. (27 Jan 1921)
  • 1955 – According to the royal chartered Imperial Bank of India changed into State Bank of India on 30 April 1955.

Bank of Calcutta

It was the first Presidency Bank.

It started with total capital 50 Lakh out of which 10 lakh was the share of East India Company.

At Cawnpore in 1862, the amalgamation of Dacca Bank (DHAKA BANK) (established in 1846) with the Bank of Bengal.

The State Bank of India Act, 1955, came into force on July 1, 1955 and the undertaking, which the State associated banks were made the subsidiaries of the State Bank of India.

  • The State Bank of Bikaner and Jaipur
  • The State Bank of Indore
  • The State Bank of Mysore 
  • The State Bank of Patiala 
  • The State Bank of Hyderabad
  • The State Bank of Saurashtra
  • The State Bank of Travencore

In the latest development in the year 2017, Government decides to merge the remaining State Bank of India subsidiary banks into State Bank of India.

Therefore, they passed the State Banks (Repeal and Amendment) Bill of 2017 to amend the State Bank of India (SBI) Act of 1955 to remove references related to subsidiary banks. 

Other Banks

  • 1865 – Allahabad Bank (merged with Indian Bank in 2020)
  • 1849 – Punjab National Bank 
  • 1911 – Central Bank of India
  • 1839 – Union Bank
  • 1863 – The Bank of Upper India (Defunct in 1913)
  • 1881 – Oudh Commercial Bank (Defunct in 1958)

Allahabad Bank

  • Joint Stock Banks (Allahabad Bank)
  •      (A Bank that has many shareholders is called as joint stock Bank.)
  • On April 24, 1865 a group of British founded Allahabad Bank in Allahabad.
  • The Bank is considered as one of the oldest joint stock banks which is still working and also one of the oldest public sector banks in India.

Punjab National Bank

  • Established in Lahore in Punjab province by Lala Lajpat Rai, Babu Purshotam Lal Tandon, S.Dayal Singh, and others.
  • It was the first bank purely managed by Indians.
  • It was established by Indian nationalist people

Central Bank of India

  • First Indian commercial bank wholly owned and managed by Indians.
  • ​The bank was also known as the First Truly Swadeshi bank of India.
  • ​It was founded by Sir Sorabji Pochkhanawala
  • First Chairman was Sir Pherozeshah Mehta.
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