The banking journey in India started with the Bank of Hindustan in Kolkata (formerly Calcutta) in 1770, but it closed down in 1832. Then came the Presidency Banks, which were backed by the government:
These banks merged to form the Imperial Bank of India in 1927, which later became the State Bank of India in 1955.
Here are some old Indian banks you should know about:
Allahabad Bank (1865) – India’s oldest joint-stock bank still running
Oudh Commercial Bank (1881) – First limited liability bank, but failed in 1958
Punjab National Bank (1895) – First bank managed by Indians only
The Swadeshi movement between 1906 and 1911 led to the establishment of many banks funded by Indian businessmen and politicians.
In 1969, 14 major banks were nationalized, and 6 more joined in 1980. As of 2017, there were 27 public sector banks (PSBs). Now, there are 12 PSBs, including 7 large ones and 5 smaller ones.
Recently, the Finance Ministry announced a merger of some public sector banks, which the RBI approved. Syndicate Bank, Oriental Bank of Commerce (OBC), United Bank of India, Andhra Bank, Corporation Bank, and Allahabad Bank were removed from the Second Schedule of the RBI Act after the merger.
Here’s a summary of the merged banks:
PNB + OBC + United Bank of India = 2nd largest PSB
Union Bank of India + Andhra Bank + Corporation Bank = 5th largest PSB
That’s a quick overview of India’s banking history. Good luck with your studies, and stay tuned to the Pareeksha Blog for more!