Briefy note about History and Development of Banks

3. STAGES IN HISTORY OF BANKING IN INDIA
History of Banking has been divided into
Stages like:
• Pre-independence stage
• Post Independence stage
• Nationalisation of Banks
• Introduction of Financial Sector Reforms
• IT revolution in Banks

4. History of Banking in India
Phase- I ( Early Phases from1786-1969 of Indian
Banks)
Phase- II (1949 Nationalisation of IndianBanks
and upto 1991 prior to Indian Banking Sector
Reforms)
Phase-III (New Phase of Indian Banking System
with the advent of Indian Financial and Banking
Sector Reforms after 1991)

6. In the mid of 19 century East India Company
IMPERIAL BANK OF INDIA
(1920)
Bank of Bengal
(1809)
Bank of Bombay
(1840)
Bank of Madras
(1843)

7. Later in
1865 Allahabad Bank
1894 Punjab National Bank
1906-1913 Bank of India, Central Bank of
India, Bank of Baroda, Canara
Bank, Indian Bank, Bank of
Mysore
1935 RESERVE BANK OF INDIA

8. During First Phase
• The growth of banks was very slow.
• Banks experienced periodic failures between
1913-1948.
• 1100 Banks (Approx.) mostly small.
• To streamline that the Government of India
came up with THE BANKING COMPANIES
ACT,1949.

9. THE BANKING COMPANIES
ACT, 1949
BANKING REGULATION ACT,1949
(as per amending Act of 1965- Act No. 23
of 1965)

10. RBI was vested with extensive powers for
the supervision of banking in India as the
Central Banking Authority.

11. (1949 Nationalisation of IndianBanks
and upto 1991 prior to Indian Banking
Sector Reforms)

12. After Independence,
Imperial Bank
State Bank India Act,
1955
State Bank of India

13. 1949 ---- Banking Regulation Act
1955 ---- Nationalisation of SBI
1959 ---- Nationalisation of SBI subsidiaries
(7 Banks)
1961---- Insurance cover extended to deposits
1969 ---- Nationalisation of 14 major Banks
1971---- Credit Guarantee Corporation
1975 ---- Regional Rural Banks
1980 ---- Six Banks with deposits over 200 crores
were nationalised

14. (New Phase of Indian Banking System
with the advent of Indian Financial
and Banking Sector Reforms after
1991)

15. In 1991
Government opened the gate of Liberalisation of
banking practices as per the report of a banking
committee set up under the chairmanship of
Mr.M.Narasimham
(Narasimham Committee for the development and
growth of the Indian Banking System)

16. In 1993
• The Government merged New Bank of India
with Punjab National Bank.
• It was the only merger between nationalised
banks and resulted in the reduction of the
number of nationalised banks from 20 (14+6=
20) to 19.

17. Till now
Banking industry has changed tremendously
with retail banking shifting to universal
banking.
The country is flooded with foreign banks.
ATM, Phone Banking, Internet Banking etc.,
was introduced.
The entire banking system became more
convenient and swift.
The financial system of India shown a great deal
during this phase.