EVOLUTION OF BANKING IN INDIA
The
first public banking institution was The Bank of Venice, founded in 1157. The
Bank of Barcelona and the bank of Genoa were established in 1401 and 1407
respectively. These are the recognized forerunners of modern commercial banks.
Exchange banking was developed after the installation of the Bank of Amsterdam
in 1609 and Bank of Hamburg in 1690.
The
credit for laying the foundation of modern banking in England goes to the
Lombards of Italy who had migrated to other European countries and England. The
bankers of Lombardy developed the money lending business in England. The Bank
of England was established in 1694. The development of joint stock commercial
banking started functioning in 1833. The modern banking system actually
developed only in the nineteenth century.
In
India, the first modern / presidency bank ‘Bank of Bengal’ was established on
June 2, 1806 in the Bengal presidency with the capital of 50 lakhs. The ‘Bank
of Bombay’ was setup as second presidency bank in 1842 with the capital of 52
lakhs. The third among the presidency bank was the ‘Bank of Madras’ setup in
1843 with capital of 3o lakhs. These Presidency banks were governed by Royal
Charters.
In
1865, the first Indian owned bank called "Allahabad Bank" was setup. This bank is one of the oldest surviving banks
in India. The second Indian owned bank,
Punjab National Bank was set up in 1895 in Lahore, and the third, Bank of India
was set up in 1906 in Mumbai. All these banks were founded under private
ownership. During the period of 1906 to 1913, many Indian commercial banks were
established such as Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank,
and Bank of Mysore.
The
presidency banks were amalgamated into a single bank as the Imperial Bank of
India, in 1921. The Imperial Bank of India also functioned as a central bank
prior to the establishment of the Reserve Bank in 1935. Thus, during this
phase, the Imperial Bank of India performed three set of functions, viz.,
commercial banking, central banking and the banker to the government. The
Imperial Bank of India was converted into the State Bank of India in 1955 with
the enactment of the State Bank of India Act, 1955 with the objective of
nationalization.
In 1969, Fourteen banks
with deposits of over Rs.50 crore were nationalised such as the
Central Bank of India, Bank of Maharashtra, Dena Bank, Punjab National Bank,
Syndicate Bank, Canara Bank, Indian Overseas Bank, Indian Bank, Bank of Baroda,
Union Bank, Allahabad Bank, United Bank of India, UCO Bank and Bank of India.
In 1980, Six banks with deposit liabilities
of Rs.200 crore and above were nationalised, viz, Andhra Bank, Corporation
Bank, New Bank of India, Oriental Bank of Commerce, Punjab and Sind Bank, and
Vijaya Bank.
In
order to initiate competition in the Banking Sector, RBI allowed
entry of private sector banks& freedom to open more branches to
de-regularize banking sector in 1992-1993.
In early 2000’s, two large
Development Finance Institutions (DFI’s) were converted into banks. In 2001, ICICI
Ltd. (the second largest DFI) became the first DFI to convert itself into bank.
In 2004, Industrial Development Bank of India (IDBI), the first largest DFI,
was converted into bank as IDBI Bank Ltd. During the period of 2000’s, four new private sector banks, one new public sector bank and sixteen new foreign banks were established (which includes major Banks like Federal Bank, ING Vysya Bank, HDFC Bank, IndusInd Bank, Yes bank etc.,)
0 comments:
Post a Comment