About Banking Industry

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    About banking industry

    Banking in India originated in the last decades first banks were The General Bank of India,

    which started in 1786, andBank of Hindustan, which started in 1770; both are now defunct.

    The oldest bank in existence in India is theState Bank of India, which originated in theBank

    of Calcuttain June 1806, which almost immediately became theBank of Bengal. This was

    one of the three presidency banks, the other two being theBank of Bombayand theBank of

    Madras, all three of which were established under charters from the British East India

    Company. For many years the Presidency banks acted as quasi-central banks, as did their

    successors. The three banks merged in 1921 to form theImperial Bank of India, which, upon

    India's independence, became theState Bank of Indiain 1955.

    History:

    Merchants inCalcuttaestablished the Union Bank in 1839, but it failed in 1840 as a

    consequence of the economic crisis of 1848-49. TheAllahabad Bank, established in 1865 and

    still functioning today, is the oldest Joint Stock bank in India.(Joint Stock Bank: A company

    that issues stock and requires shareholders to be held liable for the company's debt) It was not

    the first though. That honor belongs to the Bank of Upper India, which was established in

    1863, and which survived until 1913, when it failed, with some of its assets and liabilities

    being transferred to theAlliance Bank of Simla.

    Foreign banks too started to app, particularly inCalcutta, in the 1860s. TheComptoird'Escompte de Parisopened a branch in Calcutta in 1860, and another inBombayin 1862;

    http://en.wikipedia.org/w/index.php?title=Bank_of_Hindustan&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Bank_of_Hindustan&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Bank_of_Hindustan&action=edit&redlink=1http://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/Bank_of_Bengalhttp://en.wikipedia.org/wiki/Bank_of_Bengalhttp://en.wikipedia.org/wiki/Bank_of_Bengalhttp://en.wikipedia.org/wiki/Bank_of_Bombayhttp://en.wikipedia.org/wiki/Bank_of_Bombayhttp://en.wikipedia.org/wiki/Bank_of_Bombayhttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Calcuttahttp://en.wikipedia.org/wiki/Calcuttahttp://en.wikipedia.org/wiki/Calcuttahttp://en.wikipedia.org/wiki/Allahabad_Bankhttp://en.wikipedia.org/wiki/Allahabad_Bankhttp://en.wikipedia.org/wiki/Alliance_Bank_of_Simlahttp://en.wikipedia.org/wiki/Alliance_Bank_of_Simlahttp://en.wikipedia.org/wiki/Alliance_Bank_of_Simlahttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/wiki/Comptoir_d%27Escompte_de_Parishttp://en.wikipedia.org/wiki/Comptoir_d%27Escompte_de_Parishttp://en.wikipedia.org/wiki/Comptoir_d%27Escompte_de_Parishttp://en.wikipedia.org/wiki/Comptoir_d%27Escompte_de_Parishttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Comptoir_d%27Escompte_de_Parishttp://en.wikipedia.org/wiki/Comptoir_d%27Escompte_de_Parishttp://en.wikipedia.org/wiki/Kolkatahttp://en.wikipedia.org/wiki/Alliance_Bank_of_Simlahttp://en.wikipedia.org/wiki/Allahabad_Bankhttp://en.wikipedia.org/wiki/Calcuttahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/wiki/Imperial_Bank_of_Indiahttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Bank_of_Madrashttp://en.wikipedia.org/wiki/Bank_of_Bombayhttp://en.wikipedia.org/wiki/Bank_of_Bengalhttp://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/Bank_of_Calcuttahttp://en.wikipedia.org/wiki/State_Bank_of_Indiahttp://en.wikipedia.org/w/index.php?title=Bank_of_Hindustan&action=edit&redlink=1
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    branches inMadrasandPondicherry, then a French colony, followed.HSBCestablished itself

    inBengalin 1869. Calcutta was the most active trading port in India, mainly due to the trade

    of theBritish Empire, and so became a banking center.

    The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in

    1881 inFaizabad. It failed in 1958. The next was thePunjab National Bank, establishedinLahorein 1895, which has survived to the present and is now one of the largest banks in

    India.

    Post independence :

    Thepartition of Indiain 1947 adversely impacted the economies ofPunjabandWest Bengal,

    paralyzing banking activities for months. India'sindependencemarked the end of a regime of

    theLaissez-fairefor the Indian banking. TheGovernment of Indiainitiated measures to play

    an active role in the economic life of the nation, and the Industrial Policy Resolution adopted

    by the government in 1948 envisaged amixed economy. This resulted into greaterinvolvement of the state in different segments of the economy including banking and finance.

    The major steps to regulate banking included:

    TheReserve Bank of India, India's central banking authority, was established in April1935, but was nationalized on January 1, 1949 under the terms of the Reserve Bank of

    India (Transfer to Public Ownership) Act, 1948 (RBI, 2005b).[1]

    In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank ofIndia (RBI) "to regulate, control, and inspect the banks in India".

    The Banking Regulation Act also provided that no new bank or branch of an existingbank could be opened without a license from the RBI, and no two banks could havecommon directors.

    Nationalization:

    Despite the provisions, control and regulations ofReserve Bank of India, banks in India

    except theState Bank of Indiaor SBI, continued to be owned and operated by private

    persons. By the 1960s, the Indian banking industry had become an important tool to facilitate

    the development of theIndian economy. At the same time, it had emerged as a large

    employer, and a debate had ensued about the nationalization of the banking industry. Indira

    Gandhi, thenPrime Minister of India, expressed the intention of theGovernment of Indiain

    the annual conference of the All India Congress Meeting in a paper entitled"Stray thoughts

    on Bank Nationalisation."[2]The meeting received the paper with enthusiasm.

    Thereafter, her move was swift and sudden. The Government of India issued an ordinance

    ('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969'))

    andnationalisedthe 14 largest commercial banks with effect from the midnight of July 19,

    1969. These banks contained 85 percent of bank deposits in the country.[2]Jayaprakash

    Narayan, a national leader of India, described the step as a "masterstroke of political

    sagacity."Within two weeks of the issue of the ordinance, theParliamentpassed the Banking

    Companies (Acquisition and Transfer of Undertaking) Bill, and it receivedthepresidentialapproval on 9 August 1969.

    http://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/Chennaihttp://en.wikipedia.org/wiki/Pondicherryhttp://en.wikipedia.org/wiki/Pondicherryhttp://en.wikipedia.org/wiki/Pondicherryhttp://en.wikipedia.org/wiki/HSBChttp://en.wikipedia.org/wiki/HSBChttp://en.wikipedia.org/wiki/HSBChttp://en.wikipedia.org/wiki/Bengalhttp://en.wikipedia.org/wiki/Bengalhttp://en.wikipedia.org/wiki/Bengalhttp://en.wikipedia.org/wiki/British_Rajhttp://en.wikipedia.org/wiki/British_Rajhttp://en.wikipedia.org/wiki/British_Rajhttp://en.wikipedia.org/wiki/Faizabadhttp://en.wikipedia.org/wiki/Faizabadhttp://en.wikipedia.org/wiki/Faizabadhttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/Punjab_National_Bankhttp://en.wikipedia.org/wiki/Lahorehttp://en.wikipedia.org/wiki/Lahorehttp://en.wikipedia.org/wiki/Lahorehttp://en.wikipedia.org/wiki/Partition_of_Indiahttp://en.wikipedia.org/wiki/Partition_of_Indiahttp://en.wikipedia.org/wiki/Partition_of_Indiahttp://en.wikipedia.org/wiki/Punjab,_Indiahttp://en.wikipedia.org/wiki/Punjab,_Indiahttp://en.wikipedia.org/wiki/Punjab,_Indiahttp://en.wikipedia.org/wiki/West_Bengalhttp://en.wikipedia.org/wiki/West_Bengalhttp://en.wikipedia.org/wiki/West_Bengalhttp://en.wikipedia.org/w/index.php?title=Indian_independence_goverment&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Indian_independence_goverment&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Indian_independence_goverment&action=edit&redlink=1http://en.wikipedia.org/wiki/Laissez-fairehttp://en.wikipedia.org/wiki/Laissez-fairehttp://en.wikipedia.org/wiki/Laissez-fairehttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Government_of_Indiahttp://en.wikipedia.org/wiki/Mixed_economyhttp://en.wikipedia.org/wiki/Mixed_economyhttp://en.wikipedia.org/wiki/Mixed_economyhttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Rese