History of bank in India (1770-2023)

In this Article, We would like to study about History of bank in India which is important for many competitive examinations.So we have brought complete details of the Banking History of India in short and simple language for you.

Table of Contents

Introduction

In 1920, the British Government constituted the Hilton Young Committee. The British Government constituted this committee to set up the Indian currency and finance. The report of this committee came in 1926, on whose recommendation a central bank was established in India in 1935. This bank was named Reserve Bank of India.Later this bank was nationalized on April 1, 1949.
C.D. Deshmukh became the first RBI Governor of independent India.
In 1921, a new bank was established by merging ‘The Bank of Bengal’, ‘Bank of Bombay’, and ‘Bank of Madras’, which was named ‘Imperial Bank of India’. This bank was the largest commercial bank in the Indian subcontinent.in 1955 on the recommendation of the Gorwala Committee’, the name of this bank was changed to State Bank of India. There are also 7 subsidiary banks of the State Bank of India which were Nationalization in 1959.

Table: 01 History of bank in India

S.N	Bank Name	Established year
1.	State bank of Saurashtra	1902
2.	State bank of Hyderabad	1941
3.	State bank of Patiala	1917
4.	State bank of Mysore	1913
5.	State bank of Bikaner and Jaipur	1963
6.	State bank of Indore	1920
7.	State bank of Travancore	1945

Note- The State bank of Bikaner and Jaipur was established in 1963 by merging the state bank of Bikaner and State Bank of Jaipur.

S.N	Bank Name	Established year
1.	State bank of Jaipur	1943
2.	State bank of Bikaner	1944

First bank of India?

*The first bank in India was established in 1770, which name was Bank of Hindustan.
*Punjab National Bank was established in 1894, which was India’s first bank managed by Indians.
This bank was founded by Lala Lajpat Rai. *The Central Bank of India was established in 1911, which was the first commercialized bank of India managed by the people of India. The names and year of establishment of some of the oldest banks in India are given in the table below.

Table: 02 History of bank in India

S.N	Bank Name	Established year
1.	Bank of Hindustan	1770
2.	General bank of India	1786
3.	Bank of Bengal	1809
4.	Bank of Bombay	1840
5.	Allahabad Bank	1865
6.	Bank of Madras	1843
7.	Punjab National Bank	1894
8.	Bank of India	1906
9.	Bank of Baroda	1908
10.	Central Bank Of India	1911
11.	Reserve Bank of India	1935

Table: 03 History of bank in India

The nationalization of banks in independent India took place in 1969 when the Indira Gandhi government decided to nationalize 14 banks in India. Those 14 banks are as follows

S.N	Bank Name	Established year
1.	Indian Bank	1907
2.	Punjab National bank	1894
3.	Central Bank of India	1911
4.	Dena Bank	1938
5.	Canara Bank	1906
6.	Union Bank of India	1919
7.	Uco Bank	1943
8.	United Bank	1950
9.	Allahabad Bank	1865
10.	Bank of Baroda	1908
11.	Indian Overseas Bank	1937
12.	Bank of India	1906
13.	Bank of Maharastra	1935
14.	Syndicate Bank	1925

Table: 04 History of bank in India

After a few years, the Indira Gandhi government, in 1980, nationalization 6 more banks, whose names are as follows

S.N	Bank Name	Established year
1.	Vijaya Bank	1931
2.	Corporation Bank	1906
3.	New Bank of India	1936
4.	Oriental Bank of Commerce	1943
5.	Andhra Bank	1923
6.	Punjab and Sind bank	1908

In 2015-16, the Modi government started the Indradhanush scheme on the recommendation of the P.J Nair committee, the main objective of this scheme was banking reform. The Bank Board Bureau was formed in 2016 on the recommendation of the P.J Nair Committee, it is believed that this was the biggest step in the field of bank reform after the nationalization of banks in 1969.

Table: 05 Merger of Banks in India

S.N	Acquiring Bank	Acquired Bank	Year of merger
1.	State Bank of India	State bank of Hyderabad	1^st April , 2017
2.	State Bank of India	State bank of Bikaner and jaipur	1^st April , 2017
3.	State Bank of India	State bank of Mysore	1^st April , 2017
4.	State Bank of India	State bank of Travancore	1^st April , 2017
5.	State Bank of India	State bank of Patiala	1^st April , 2017
6.	State Bank of India	Bhartiya Mahila Bank	1^st April , 2017
7.	Indian Bank	Allahabad Bank	1^st April , 2020
8.	Canara Bank	Syndicate Bank	1^st April , 2020
9.	Punjab National Bank	United Bank of India	1^st April , 2020
10.	Punjab National Bank	Oriental Bank of Commerce	1^st April , 2020
11.	Bank of Baroda	Vijaya Bank	1^st April , 2019
12.	Bank of Baroda	Dena Bank	1^st April , 2019
13.	Union Bank of India	Andhra bank	1^st April , 2020
14.	Union Bank Of india	Corporation Bank	1^st April , 2020

Modern Payment System of Banks

NPCI

NPCI means National Payment Corporation of India was established in the year 2008 as a corporation by RBI. In 2016, NPCI developed QR Code is Quick Response Code in collaboration with Visa Card and Master Card Company. On April 14, 2016, on the 150th birth anniversary of Dr. Bhimrao Ambedkar, BHIM App is Bharat Interface for Money was established, which proved to be a milestone in India’s payment history.

JANDHAN YOJANA

In 2011, the Manmohan Singh government started the “Swabhiman Yojana”, whose goal was to open a bank account for the people of villages with a population of more than 2000, but this scheme had two drawbacks .The first drawback was that under this scheme, a certain amount had to be paid to open an account in the bank and the second drawback was that it was limited to villages only .That too those villages whose population was more than 2000 which reduced the scope of this scheme.

In the year 2014, the Modi government started the Jan Dhan Yojana to provide the benefits of various schemes of India directly to the beneficiaries, under this scheme any citizen of India could open a bank account in the bank. This scheme was for all rural and urban people.

India Post Payment Bank

In the financial year 2015-16, the Central Government announced the establishment of India Post Payment Bank in the Department of Post. This year it also got approval from RBI.

From April 1, 2018, IPPB started in the whole country. IPPB’s motto is – No customer is too small, no transaction is too small and no deposit is too small.

Digitization of post office

In 2017, the then Minister of State for Communications Manoj Sinha launched the Darpan project. The objective of this scheme was to modernize rural post offices on the lines of urban post offices. The full form of Darpan is Digital Advancement of Rural Post Office for a New India. Under this project, technology tools were to be provided to rural post offices so that this rural post could be digitized.

Q. When was the Punjab National Bank established?

Ans. 1894

Q. When was the State Bank of India established?

Ans. 1955

Questions and Answers on (History of bank in India)

Q.1 In which year RBI was established?

Ans . 1935

Q.2 When did RBI nationalize?

Ans. 1949

Q.3 When was the State Bank of India established?

Ans. 1955

Q.4 Imperial Bank of India was formed in 1921 by the merger of which three banks?

Ans. ‘Bank of Bombay’ ‘Bank of Madras’ and ‘Bank of Bengal’

Q.5 When was the first bank of India established?

Ans. 1770

Q.6 State Bank of India was established on the recommendation of which committee?

Ans. Gorwala Committee’

Q.7 How many banks were nationalized by Indira Gandhi Government in 1969?

Ans. 1969

Q.8 In which bank did the merger of Vijaya Bank and Dena Bank take place?

Ans. Bank of Baroda

Q.9 When was the National Payment Corporation of India established?

Ans. 2008

Q.10 When was the Punjab National Bank established?