History of Banking in India

1. Temple Banking:  Temples acted as financial centers, safeguarding wealth and lending money. 

Medieval Banking in India 

1. Indigenous Bankers (Shroffs, Sahukars, Chettiars, Marwaris):  They managed deposits, lending, and hundis (promissory notes). 

1. Hundi System:  A safe way of remittance across regions, similar to modern cheques. 

1. Foreign Influence:  Arab traders and later Europeans introduced new financial practices in Indian ports.

Modern Banking in India – Colonial Era 

The modern banking system in India began with the establishment of Presidency Banks under British rule. 

Key Milestones 

1. 1770: First Indian bank – Bank of Hindustan (closed in 1832). 

1. 1806: Bank of Calcutta (later Bank of Bengal). 

1. 1840 & 1843: Bank of Bombay and Bank of Madras. 

1. 1921: Merger of the three into Imperial Bank of India (later State Bank of India in 1955). 

1. 1865: Allahabad Bank – first bank entirely run by Indians. 

1. 1894: Punjab National Bank founded by Indian leaders. 

Post-Independence Era of Indian Banking 

1. Nationalization of Banks (1969 & 1980)

1. 14 major banks were nationalized in 1969. 

1. 6 more were nationalized in 1980. 

1. Aim: Financial inclusion, rural credit, and social banking. 

2. Formation of NABARD (1982) 

1. Established to strengthen rural credit and agricultural development. 

3. Liberalization & Reforms (1991 onwards)

1. Entry of private sector banks like ICICI, HDFC, Axis, Kotak. 

1. Growth of ATM networks, credit cards, and internet banking. 

Digital Banking Era in India 

1. 2000s: Launch of core banking solutions and net banking. 

1. 2010s: Growth of mobile banking apps, digital wallets, and UPI. 

1. 2016 onwards: Push for cashless economy post-demonetization. 

1. Today: India leads in digital transactions with UPI crossing billions of monthly payments. 

Timeline of Indian Banking Evolution 

1. Ancient Period: Temple banking, money lending. 

1. Medieval Period: Hundis, indigenous bankers. 

1. Colonial Era: Presidency banks, Imperial Bank of India. 

1. Post-Independence: Nationalization & rural credit focus. 

1. Post-1991 Reforms: Private banks, liberalization. 

1. Current Era: Digital banking & fintech revolution.