CHAPTER-1

INDIAN BANKING HISTORY

Banking history of India is divided into two major categories –

Pre-Independence Banking History

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These Presidency banks worked as quasi central banks in India for many years under British Rule.

Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking center.

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The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community.  The period between 1906 and 1911 thousands of Banks were established in India. Many of those banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India.

Post-Independence Banking History

government decided to nationalize 14 major commercial banks on 19th July, 1969.

The names of these banks are as under :

  1. The Allahabad Bank
  2. The Bank of Baroda
  3. The Bank of India
  4. The Bank of Maharashtra
  5. The Canara Bank
  6. The Central Bank of India
  7. The Dena Bank
  8. The Indian Bank
  9. The Indian Overseas Bank
  10. The Punjab National Bank
  11. The Syndicate Bank
  12. The Union Bank of India
  13. The United Bank of India
  14. The United Commercial Bank

The names of these banks are as under :

  1. The Andhra Bank
  2. The Corporation Bank
  3. The New Bank of India (merged with Punjab National Bank in 1993)
  4. The Oriental Bank of Commerce
  5. The Punjab and SIndh Bank
  6. The Vijaya Bank

Thus, 20 private sector commercial banks were nationalized and over 90 percent of banking activity in the country was brought under the public sector and it brought down the inequalities of income and wealth and to ensure greater social justice.

Practice Exercise

        Q.1. Which of the following is the oldest Public Sector Bank in India, still                   working today?

        (1) Allahabad Bank

        (2) State Bank of India

        (3) Punjab National Bank

        (4) Imperial Bank of India

        (5) Bank of Hindustan

        Q.2. In which year Bank of Hindustan was established?

        (1) 1770

(2) 1882

(3) 1885

(4) 1796

(5) 1885

Q.3. Which of the following was the first Presidency Bank during the British Raj?

(1) Bank of Bengal

(2) Bank of Bombay

(3) Bank of Calcutta

(4) Bank of Madras

(5) None of these

Q.4. RBI was nationalised on-

(1) 1 July 1949        

(2) 26 Jan 1951        

(3) 1 April 1935        

(4) 1 July 1955        

(5) 1 Jan 1949

        Q.5. The 14 major banks in the country were nationalized in the year-

        (1) 1955

(2) 1947

(3) 1967

(4) 1970

(5) 1969

Q.6. Name the first women bank of India?

(1) Bharatiya Mahila Bank

(2) Indian Women Bank

(3) State Bank of India

(4) Punjab National Bank

(5) None of these

Answers with Explanation

Q.1. (1) Allahabad Bank was established in 1865 and working even today. It is the oldest Public Sector Bank in India.

Q.2. (1) Bank of Hindustan was established in 1770 and it was the first bank at Calcutta under European management.

Q.3. (3) On June 2, 1806 the Bank of Calcutta was established in Calcutta. It was the first Presidency Bank during the British Raj.

Q.4. (3) On the recommendation of Hilton-Young Commission, on 1st April 1935 Reserve Bank of India was established.

Q.5. (5) The government nationalized 14 major commercial banks on 19th July, 1969.

Q.6. (1) On 19th November 2013 the first women bank of India "Bharatiya Mahila Bank" was established.

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