History of Banking

Banking in India according to modern customs was a pretty foreign concept for people in India. When it comes to Banking in India we think about private, public, regional, cooperative banks currently present in India; but these banks didn’t emerge until the 1900s. There were a few banks introduced in the late 1700s but they didn’t last long as the concept of trading and banking was foreign for the citizens of India.

Before Independence:

In the ancient period, there are few Zamindars who used to provide money to people in need at a high-interest rate. As there were no banks, these Zamindaars earned a lot of money through the interest charged. Later when the British soldiers invaded India, the concept of banking and finance changed and few banks were established.

The first bank established in India was Bank of Hindustan; it was established in the year 1770 but was later liquidated in the early 1800s. Similarly, the General Bank of India was also established in the late 1700s but was liquidated within the five years of establishment. The only bank (the oldest and largest bank in India) which was established in the early 1800s and still is very well known in India is ‘State Bank Of India’ Which was earlier known as ‘Bank of Calcutta’.

Post-Independence:

• Catering to Major organisations and Businesses:

Most of the banks in India were established to provide finance to the organisations and businesses present in India, there were no proper policies issued for providing finance to the individual and the Indian citizens. Therefore villagers and the people from the lower class background were being exploited by the Zamindars.

• Rise of Banking in India:

From the year 1969 to the year 1980, around 20 commercial banks were established in India and most of these banks are still providing financial aids to the citizens of India.

• Banking with the public interest:

Post-1991, more banks started providing benefits and financial aid to the common people. The public started to create their accounts in private, public, commercial and regional banks present in India and started investing in the policies offered by these banks.

By the late 2000s and early 2010s, more policies were introduced in India where the banking sector provided financial aid to everyone alike. More benefits and features were introduced by private, public and regional banks of India. The Government also initiated and established new banks especially for farmers who want to install new machinery for their farm. After Make in India was introduced, Entrepreneurs and start-ups in India have seen a lot of financial growth in their organisation; since the Make in India policy included that the start-ups will be provided with tax exemptions if the product is being manufactured with materials produced in India. With new policies being introduced the growth of the economy is increasing every day and is changing the lifestyle of the citizens.