Banking is an old as civilization.
Our writers will create one from scratch for
The practice of money lending, the predecessor of banking has been practiced in india from time immemorial. During the mughal period, the indigenous bankers were faintly prominent in financing the trade and use of instrument for trade. The first bank in India, through conservative was established in1786. From 1786 until today the Journey of Indian banking system can be segregated into 3 distinct phase. They are mentioned below, Early phase from 1786 t01969 of Indian banks
Nationalization of Indian banking sector reforms New phase of Indian banking system with the advent of Indian financial and banking sector reforms. To make this more explanatory, the scenario can be pre fixed as phase 1, phase 2, phase 3.
Phase – 1 (1789-1969) The general bank of India was set up in the year 1786. Next come the Bank of Hindustan and Bank of Bengal. The East India company established Bank of Bengal(1809) Bank of Bombay(1840) and Bank of Madras(1843) as independent units and called it presidency Banks.
These three amalgamated in 1920 and Imperial Bank f India was established. In 1865, Allahabad Bank was established and first time exclusively by Indian, Punjab National Bank Ltd.
Was set up in 1894 with headquarters at Lahore. Between 1906 and 1913 Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank and Bank of Mysore were set up. Reserve Bank Of India come up in 1935. During the first phases the growth was very show and bank experienced periodic failure between 1913 and 1948. The govt.
of India came up with Banking companies Act, 1949 as per amending Act 1965.
Reserve Bank of India was vested with extensive over the supervision of banking in India as central banking activity. SECOND PHASE Government took major step in this Indian, banking sector reforms after independence in 1955, it nationalized imperial bank of India with extensive banking facilities on a large scale specially in rural and semi urban areas. However the major process of Nationalization was carried out on 19th July, 1969 when the prime minister of India, Mrs. Indira Gandhi announced the nationalization of 14 major commercial banks in the country.
Second phase of nationalization of Indian banking sector reform was carried out in 1980 with 7 more banks.
This step brought 80% of the banking in India under government ownership. 1949: Enactment of Banking Regulation Act 1955: Nationalization of State Bank of India 1959: Nationalization cover extended to SBI subsidiaries 1961: Insurance cover extended to deposits 1969: Nationalization of 14 major Banks 1971 Creation ot credit guarantee corporation 1975: Creation of Regional Rural Bank 1980: Nationalization of 7 banks with deposits over 200 crores THIRD PHASE (Post 1991)
This phase has introduce many more product facilities in the banking sector in its reform pleasure. In 1991, under the leadership of M. Narasimham, committee was set up by this name, which worked as the liberalization of banking practices. The country is flooded with foreign banks and their ATM station.
Efforts are being put to give a satisfactory services to customers. Phone banking and net banking was introduced. The entire system became more convenient and suit. Time is given more importance than money. The financial system of India has shown great deal of resilience.
It is sheltered from any crisis triggered by any external macro economic shock as other East Asian countries suffered.
This is all due to a flexible exchange rate regime, the origin reserves are high, the capital account is not get convertible, and bank and their customers have limited foreign echange exposure.