Introduction To India Banks And Banking
The single most important player in the financial sector of India has been the institution of banking. In India banks have always been an important part of the social as well as economic fabric. The modern history of Indian banks can be traced back to the 18th century. The very first bank in India was the General Bank of India was established in 1786. This was closely followed by Bank of Hindustan.
The oldest bank that is still functional in India is the State Bank of India. It was established as Bank of Bengal in 1806. This makes it one of the oldest banks in Indian subcontinent. The bank was merged with Bank of Madras and Bank of Bombay to form the Imperial Bank of India which was gradually renamed to the State Bank of India. The first foreign bank to step in India was Credit Lyonnais. Its operations started in 1850s.
Today the Reserve Bank of India is the apex of Indian banking system. Its headquarters are located in Mumbai. The Reserve Bank of India is the central bank of the country. It is also the supreme monetary authority of the country. The bank was established in 1935. Its role includes most of the duties that the Bank of England does and some of the duties that HM Treasury undertakes in the United Kingdom.
The Reserve Bank was established as a private entity but the Government of India nationalized it in 1949. Since then it has been in control of the banking sector of India. Below the RBI come all the scheduled banks that operate in Indian territory. The scheduled banks are divided in two families Â- the commercial banks and the cooperative banks. The cooperative banks are further classified in urban cooperatives and state cooperatives. The commercial banks are further classified in four families. These are the foreign banks, public sector banks, regional rural banks as well as the private sector banks. The private sector banks are further classified as old banks and new banks. On the other hand the public sector banks are classified as State Bank of India and its associate banks as well as the Other nationalized banks which do not carry the State bank logo. As of 2007, Indian banks have become well integrated in the social fabric of the country. While the public sector banks have deep penetration even in the hinterland of the country, the foreign and private banks still remain focussed on the urban areas like metropolitan cities and densely populated towns. For the people of India banks are no longer just a safe haven to stash their savings. The banks have also started to provide a number of services in collaboration with other organizations like investment consultancy and insurance services.
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