Banking Awareness 06: History of Banking.

If you are very anxious to know about the History of Banking then this article provides you the clear information about it. The History of Banking began with the first prototype banks which were the merchants of the world, who made grain loans to farmers and traders who carried goods between cities. Development of banking spread from northern Italy throughout the Holy Roman Empire, and in the 15th and 16th century to northern Europe.

These indigenous bankers included very small money lenders to shroffs with huge businesses, who carried on the large and specialized business even greater than the business of banks. There are plenty of references available in the ancient Indian literature regarding an indigenous banking system that financed the trade and commerce in the country. The businessmen called Shroffs, Seths, Sahukars, Mahajans, Chettis, etc. had been carrying on the business of banking since ancient times.

Here we are mentioning the contents of the History of Banking, they are:-

1. Origin Modern Banking Industry in India.

• First Bank of India.
• Presidency Banks.
• Imperial Bank of India.
• Oldest Joint Stock Bank of India.
• First banks owned/ Managed by Indians.
• First bank to open a branch at foreign Soil.

2. Important Years in the History of Banking in India.

3. Important Dates of Establishment of Various Banks.

Origin Modern Banking Industry in India:- 

1. First Bank of India:- The first bank of India is the Bank of Hindustan established in 1770. This bank was established at Calcutta under European management. It was liquidated in 1830-32.
2. Presidency Banks:- From 1612 onwards, British East India Company had set up various factories or trading posts in India with the permission of the local Mughal emperors. In this process, they had established three presidency towns viz. Madras in 1640, Bombay in 1687 and Bengal Presidency in 1690. East India Company’s headquarters moved from Surat to Bombay.

• 02-Jun-1806:- Bank of Calcutta was established in 1806; it was renamed in 1809 as Bank of Bengal
• 15-Apr-1840:- Bank of Bombay established.
• 01-Jul-1843:- Bank of Madras established.

These worked as quasi-central banks in India for many years. Since Calcutta was the most active trading port in India, mainly due to the trade of the British Empire.

       3. Imperial Bank of India:-  In 1921, the presidency of banks like Bank of Bengal, Bank of Bombay, and Bank of Madras were amalgamated to form an Imperial Bank of India. It was a Private Entity till that time and in 1955, this Imperial Bank of India was Nationalized and renamed as State Bank of India. Thus, State bank of India is the oldest Bank of India among the banks that exist today.

       4. Oldest Joint Stock Bank of India:- A bank that has multiple shareholders is called the joint-stock bank. Oldest Joint Stock Bank of India was Bank of Upper India that was established in 1863. But this bank was failed in 1913 and the Indias Oldest Joint Stock bank which is Still Working is Allahabad Bank. It is also known as the Indias Oldest Public Sector Bank which is established in 1865.

        5. First banks owned/ Managed by Indians:- The First Bank with the Limited Liability/Responsibility to be managed by Indian Board was Oudh Commercial bank. It was established in 1881 at Faizabad. This bank failed in 1958, the first bank purely managed by the Indians was Punjab National Bank which is established in Lahore in 1895.

        6. The first bank to open a branch at foreign Soil:- Bank of India was the first Indian bank to open a branch outside India in London in 1946 and the first to open a branch in continental Europe at Paris in 1974. Bank of India was founded in Sep-1906, as a private entity and also it was Nationalized in Jul-1969.

Important Years in the History of Banking in India:- 

Important Dates of Establishment of Various Banks:-