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Banks in India

India has a well developed banking system. Most of the banks in India were founded by Indian visionaries and entrepreneurs in the pre-independence era to provide financial assistance to traders, agriculturists and budding Indian industrialists. The origin of banking in India can be traced back to the last decades of the 18th century. The General Bank of India and the Bank of Hindustan, which started in 1786 were the first banks in India. Both the banks are now defunct. The oldest bank in existence in India at the moment is the State Bank of India.

Indian banks can be generally classified into public sector banks (those banks in which the Government of India holds a stake), private banks (government doe not have a stake in these banks; they may be publicly listed and traded on stock exchanges) and foreign banks.

Reserve Bank of India: The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. Though originally RBI was privately owned, it was nationalized in 1949.

Its central office is in Mumbai where the Governor of RBI sits.

Savings Bank Account: Savings Bank Accounts are meant to promote the habit of saving among the citizens while allowing them to use their funds when required. The main benefit of Savings Bank Account is its high liquidity and safety.

Senior Citizen Saving Scheme 2004: The Senior Citizen Saving Scheme 2004 had been introduced by the Government of India for the benefit of senior citizens who have crossed the age of 60 years. However, under some conditions the people above 55 years of age are also eligible to enjoy the benefits of this scheme.

Foreign Banks in India : Foreign banks have brought latest technology and banking practices in India. They have made Indian Banking system more competitive and competent. Government has come up with a road map for expansion of foreign banks in India.

Nationalised Banks : Nationalised banks dominate the banking system in India. The history of nationalized banks in India dates back to mid-20th century, when Imperial Bank of India was nationalized (under the SBI Act of 1955) and re-christened as State Bank of India (SBI) in July 1955.

Private Banks in India : Firstly, all the banks in India were private banks, which were founded in the pre-independence era to cater to the banking needs of the people. In 1921, three major banks i.e. Banks of Bengal, Bank of Bombay, and Bank of Madras, merged to form Imperial Bank of India.