History of Indian Banking System, First Bank of India

New Delhi:

Banking History of India:

The contribution of the banking system in strengthening the country's economy cannot be denied.

Even before independence, the foundation of banking system was laid and after independence, banking has established itself as the backbone of the country's economy.

India's first bank was formed in slave India.

Its name was 'Bank of Hindustan'.

It was established in 1770 and was established in the then Indian capital of Calcutta.

However, this bank failed to continue its successful work and ceased its operations in 1832.

According to available information, more than 600 banks were registered in the country before independence, but only a few of them were able to maintain success in their work. 

There were some types of important banks in these. 


General Bank of India (1786–1791)


Oudh Commercial Bank (1881–1958)


Bank of Bengal (1809)


Bank of Bombay (1840)


Bank of Madras (1843)


During British rule in India, the East India Company established three banks These were: Bank of Bengal, Bank of Bombay and Bank of Madras and they were called Presidential Banks.

These three banks were later merged in 1921 and the name of the bank formed after this merger was called 'Imperial Bank of India'.

Let us inform that this

Imperial Bank of India

was later nationalized in 1955 and was named State Bank of India.

Presently SBI is the largest public sector bank. 


Some banks were later revived.

The year of its establishment and the name of the bank are given here.

These banks were also established during the British rule before independence.


Allahabad Bank 1865


Punjab National Bank 1894


Bank of India 1906


Central Bank of India 1911


Canara Bank 1906


Bank of Baroda ) 1908

It is believed that some banks were closed due to lack of modernity in the banking system, corruption, management deficiencies.

After independence, efforts were made to reform the banking system.

Banks were nationalized to make the banking system accessible to the rural people.

RBI was established in 1949.

State Bank of India was nationalized in 1955 and later 14 other banks were nationalized from 1969 to 1991.

In these Allahabad Bank Allahabad Bank, Bank of India Bank of India, Bank of Baroda Bank of Baroda, Bank of Maharashtra Bank of Maharashtra, Central Bank of India Central Bank of India, Canara Bank Canara Bank, Dena Bank Dena Bank, Indian Overseas Bank Indian Overseas Bank, Indian Bank Indian Bank, Punjab National Bank Punjab National Bank, Syndicate Bank Syndicate Bank, Union Bank of India Union Bank of India, United Bank United Bank, UCO Bank UCO Bank are included.

Apart from these, 6 more banks were nationalized in 1980.

These included Andhra Bank Andhra Bank, Corporation Bank Corporation Bank, New Bank of India New Bank of India, Oriental Bank of Commerce Oriental Bank of Comm., Punjab and Sind Bank Punjab & Sind Bank, Vijaya Bank Vijaya Bank.

Banks affiliated with SBI like State Bank of Patiala State Bank of Patiala, State Bank of Hyderabad State Bank of Hyderabad, State Bank of Bikaner & Jaipur State Bank of Bikaner & Jaipur, State Bank of Mysore State Bank of Mysore, State Bank of Travancore State Bank of Travancore, State Bank of Saurashtra State Bank of Saurashtra, State Bank of Indore State Bank of Indore were included.

Between 2008 and 2017, all the banks were merged with State Bank of India.

It is noteworthy that in order to strengthen the rural areas, a chain of banks has been established.

They were given the status of Regional Rural Bank (RRB).

The year 1991 was also important in the Indian banking system.

At this time, first the government and then the RBI gave its approval to establish at least 10 private banks.

These include Global Trust Bank Global Trust Bank, ICICI Bank ICICI Bank, HDFC Bank HDFC Bank, Axis Bank Axis Bank, Bank of Punjab Bank of Punjab, IndusInd Bank IndusInd Bank, Centurion Bank Centurion Bank, IDBI Bank IDBI Bank, Times Bank Times Bank , Development Credit Bank includes Development Credit Bank. 


Along with this, some foreign banks were also allowed to do their work in India. 

If seen, after Indira Gandhi, after Narasimha Rao's government in 1991, the present Modi government has made changes in the banking sector.

Every government has taken decisions keeping in view the solutions and needs of the contemporary problems. 

Let us inform that in the year 2017, the number of public sector banks was 27.

In the last few years, the number of PSU banks has come down from 27 to 12 now. 

Earlier in the year 2017, the Modi government had merged five subsidiary banks of State Bank of India (SBI) with State Bank of India.

These included State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala and State Bank of Hyderabad.

With this, State Bank of India became the largest bank in the country. 

In 2018, the Modi government had announced the merger of three more banks.

In these three banks, Dena Bank and Vijaya Bank were merged with Bank of Baroda.

In 2019, the government announced the merger of some more public sector banks.

Finance Minister Nirmala Sitharaman announced the merger of Oriental Bank of Commerce (OBC) and United Bank with Punjab National Bank (PNB).

With this, Punjab National Bank became the second largest bank.

Whereas Union Bank of India, Andhra Bank and Corporation Bank merged.

With this it has become the fifth largest bank.

There Indian Bank and Allahabad Bank merged.

After which it will become the seventh largest bank.

Apart from this, Canara Bank merged with Syndicate Bank.

There are now 12 public sector banks left in the country. 

  • State Bank of India State Bank of India

  • Punjab National Bank Punjab National Bank (With Merger of Oriental Bank of Commerce and United Bank of India)

  • Bank of Baroda Bank of Baroda

  • Canara Bank Canara Bank (With Merger of Syndicate Bank)

  • Union Bank of India Union Bank of India (With Merger of Andhra Bank and Corporation Bank)

  • Bank of India Bank of India

  • Indian Bank Indian Bank (With Merger of Allahabad Bank)

  • Central Bank of India Central Bank of India

  • Indian Overseas Bank Indian Overseas Bank

  • UCO Bank UCO Bank

  • Bank of Maharashtra Bank of Maharashtra

  • Punjab & Sind Bank Punjab & Sind Bank

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