1.
History Of Banking In
India

2.
Contents
❖ Introduction
❖ Ancient India
❖ Medieval Era
❖ Colonial Era
❖ Post-Independence
❖ Nationalisation in 1969
❖ Liberalisation in 1990

3.
Introduction
★ Banking in India started in the Vedic period where literature
shows giving of loans to others on interest. Modern Banking in
India began with the rise of power of the British.
★ Bank of Hindustan, which was established in 1770 and
liquidated in 1829–32; and the General Bank of India,
established in 1786 but failed in 1791 were the first ever banks
established in India.
★ Under presidency government, there were three banks
established:
1. Bank of Bombay
2. Bank of Madras
3. State bank of India (also known as Bank of Calcutta and Bank
of Bengal).
★ On 27th January 1921 all the three presidency banks were
merged together to form the imperial Bank which upon India’s
independence was renamed as State Bank of India in 1955.
★ In 1934, Reserve Bank of India (RBI) came into being which
was made the Central Bank and had the power to issue the
notes and was also the banker to the Government.

4.
Banking In Ancient India
The Vedas are the earliest Indian texts mention the
concept of usury, with the word kusidin translated as
"usurer".
Vasishtha forbade Brahmin and Kshatriya varnas from
participating in usury.
The Jatakas, Dharmashastras and Kautilya also mention the
existence of loan deeds
During the Mauryan period (321–185 BCE), an instrument
called adesha was in use. The letter of credit also existed during
Mauryan period.

5.
Banking In Medieval Era
The use of loan deeds continued into the Mughal
era and were called dastawez.
The dastawez-e-indutalab was payable on
demand and dastawez-e-miadi was payable
after a stipulated time.
There are also records of Indian bankers
using issuing bills of exchange on foreign
countries.
The evolution of hundis also occurred
during this period and remain in use.

6.
Colonial
Era
Union Bank Of India (1845-1848)
Comptoir d’Escompte de Paris (1860 Calcutta)
Grindlay’s Bank (1864)
Allahabad Bank (1865 - Still existing)
Oudh Commercial Bank (1881-1958)
HSBC (1869)

7.
Colonial Era
The presidency banks dominated banking in India but there were also some
exchange banks and a number of Indian joint stock banks.
The exchange banks, mostly owned by Europeans, concentrated on financing foreign
trade. Indian joint stock banks were generally under capitalised and lacked the
experience and maturity to compete with the presidency and exchange banks.
This segmentation let Lord Curzon to observe, "In respect of banking it seems we are
behind the times. We are like some old fashioned sailing ship, divided by solid
wooden bulkheads into separate and cumbersome compartments."

8.
Post-Independence
The Government of India initiated measures to play an active role
in the economic life of the nation and the Industrial Policy
Resolution adopted by the Government in 1948 envisaged a mixed
economy
The major steps to regulate banking included:
The Reserve Bank of
India, India's central
banking authority, was
established in April 1935,
but was nationalized on 1
January 1949 under the
terms of the Reserve Bank
of India (Transfer to
Public Ownership) Act,
1948 (RBI, 2005b).
In 1949, the Banking Regulation Act
was enacted, which empowered the
Reserve Bank of India (RBI) to
regulate, control, and inspect the
banks in India. The Banking
Regulation Act also provided that no
new bank or branch of an existing
bank could be opened without a
license from the RBI, and no two
banks could have common directors.

9.
Nationalisation in 1969
Despite the provisions, control and regulations of the Reserve Bank of India, banks in India
except the State Bank of India (SBI), remain owned and operated by private persons.
By the 1960s, the Indian banking industry had become an important tool to facilitate
the development of the Indian economy.
The following banks were nationalized in 1969:
· Allahabad Bank (now Indian Bank)
· Bank of Baroda
· Bank of India
· Bank of Maharashtra
· Central Bank of India
· Canara Bank
· Dena Bank (now Bank of Baroda)
· Indian Bank
· Indian Overseas Bank
· Punjab National Bank
· Syndicate Bank (now Canara Bank)
· UCO Bank
· Union Bank of India
· United Bank of India( now Punjab National Bank)

10.
Liberalisation in 1990
In the early 1990s, the then government embarked on a policy of liberalisation
licensing a small number of private banks.
These came to be known as New Generation tech-savvy bank, and included
Global Trust Bank, which later amalgamated with Oreintial Bank of Commerce
(since renamed Axis Bank), ICICI Bank and HDFC Bank.
This moves along with the rapid growth in economy of India, revitalised the
banking sector in India, which as seen rapid growth with strong contribution
from all the three sectors of banks namely, government bank, private bank
and foreign bank.

11.
Thank You!