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Indian Banking History Highlights

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Indian Banking History Highlights

shape Introduction

A Bank is a Financial Institution that accepts deposits (in the form of cash/ online transfers), creates credit on the deposits and lends money to the borrowers at a specified rate of interest. Indian Public Sector Banks are those banks whose majority stake (>50%) is held by the Government of India. The shares of these Indian Public Sector Banks are listed on stock exchanges.

Banking History:
The first bank established in India was Bank of Hindustan in 1770 in Calcutta under the European Government.

  • Later The East India company established The bank of Bengal in 1806, The bank of Bombay was established in 1840 and The bank of Madras which established in 1843. These three banks together is called as presidency bank. These banks merged together and become as an Imperial bank of India.

  • Allahabad bank was established by Indians in 1865 at Kolkata. Oudh commercial bank was the first commercial bank in India Which managed by the Indian Board in 1881 with limited liability at Faizabad.

  • The first purely Indian bank was Punjab national bank established in 1894 in Lahore and it is the oldest bank in India.

  • Bank of India, Central Bank of India, Bank of Baroda, Canara bank, Indian Bank and bank of Mysore these lists of banks were founded  between 1906 and 1913.

  • The reserve bank of India established in 1935.

  • The Government of India Introduced the banking companies Act, 1949 and later it changed to the Banking regulation Act,1949. This Act is used for efficient functioning and activities.

  • The Imperial bank was nationalized in 1955 and that was changed as State bank Of India with expensive banking facilities in rural and semi-urban areas. It is a largest bank in India.

  • In 1959 The State bank Of India associated with 7 banks. There are

    1. State bank of Bikaner & Jaipur

    2. State bank of Hyderabad

    3. State bank of Patiala

    4. State bank of Travancore

    5. State bank of Mysore

    6. State bank of Indore

    7. State bank of Saurashtra

  • Later the State bank of Indore and Saurashtra are merged into the Sate bank of India. Currently there are 5 SBI associated banks.

  • After 1991, many products and facilities were introduced in the banking sector as part of the reform process. During this year, the chairman was M. Narsimham, a committee was set-up, which worked for the liberalization of banking practices.

  • In this phase Phone banking and net banking are introduced to become more convenient system.

  • The nationalization of commercial bank main purpose to achieve social welfare, Controlling private monopolies, Expansion of banking, Reducing regional imbalance, priority sector lending and developing banking habits.

  • Mrs.Indira Gandhi the prime Minister of India nationalized 14 large commercial banks in 19th July, 1969.

  • These banks are nationalized with the capacity of holding more than Rs.50 crore. The main aim was to reach customers in rural areas and provide quality services.

  • The list of banks, which were nationalized in 1969.

The Banks which were nationalized in 15th April 1980, that reserve more than Rs. 200 crore are:

In 1993, the Government merged New Bank of India with Punjab National Bank and it was the only merger between nationalized banks.

shape Questions

1. Which among the following banks form the Imperial Bank of India?

    a) Bank of Bombay
    b) Bank of Madras
    c) Bank of Bengal
    d) All of the Above
    e) None of The Above

Answer: d

2. Reserve Bank of India was established under Act of __________

    a) Reserve Bank of India Act 1930
    b) Reserve Bank of India Act 1921
    c) Reserve Bank of India Act 1934
    d) Reserve Bank of India Act 1935
    e) None of The Above

Answer: c

3. RBI was established in __________

    a) 1 April, 1940
    b) 1 April, 1935
    c) 1 April 1948
    d) 1 April 1949
    e) None of The Above

Answer: b

4. When was the first nationalization of many banks in India?

    a) 19 August, 1969
    b) 19 October, 1969
    c) 19 June, 1969
    d) 19 July,, 1969
    e) None of The Above

Answer: d

5. How many banks were nationalized as on 19 July, 1969.

    a) 14
    b) 13
    c) 16
    d) 12
    e) None of The Above

Answer: a