🏦 Origin & History of Banking in India
🔤 Etymology of the Word "Bank"
● T
he term"Bank"is derived from theLatin wordbancusorFrenchbanque, meaning “bench,”
referring to moneylenders' benches in marketplaces.
● It may also originate from theGerman wordbank, meaning“joint stock fund,” which becamebanco
in Italy.
📜 Definition of Banking
● A
s per theBanking Regulation Act, 1949:
“Banking means accepting, for the purpose of lendingor investment, of deposits of money from the
public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise.”
🏛️ Ancient and Medieval Indian Banking
🕉️ Ancient Period
● Money lending (Usury)was mentioned inVedas and Jatakas.
● Mauryan Era (4th–2nd century BCE):
○ Adesha– early form of bills of exchange.
○ Rṇapatra– written loan deeds.
🕌 Mughal Period
● Thrivingindigenous bankingwith:
○ Dastawez-e-indultalab– Payable on demand.
○ Dastawez-e-miadi– Payable after a period.
○ Use ofHundis– Traditional credit instruments.
○ Key community bankers:Shroffs,Sheths,Chettis.
🇮🇳 Evolution of Modern Indian Banking
🏦 Early Banks under British Rule
Bank Establishe Note
d
Bank of Hindustan 1770 First bank in India; liquidated by 1832
General Bank of India 1786 Failed in 1791
🏛 Presidency Banks
Bank Year Later Became
Bank of Calcutta 1806 Bank of Bengal (1809)
Bank of Bombay 1840 —
Bank of Madras 1843 —
➡️
These three merged to form theImperial Bank ofIndia (1921)
➡️
Later renamedState Bank of India in 1955
🏛️ Reserve Bank of India (RBI)
● Established: 1935 (based on Hilton-Young Commission,1926)
● RBI Act: 1934
● First Governor: Sir Osborne Smith
● First Indian Governor: C. D. Deshmukh
● Nationalized: 1st January 1949
● Empowered by: Banking Regulation Act, 1949
🏆 Important Milestones & Firsts in Indian Banking
Bank/Entity Achievement
unjab National Bank
P irst Indian-owned bank (1894, Lahore; founded by Lala Lajpat
F
(PNB) Rai & others)
Presidency Bank IntroducedSavings Account(1833)
Bengal Bank IntroducedCheque System(1833)
Central Bank of India First bank managed by Indians; First to issueCreditCards
Canara Bank First Indian bank to receiveISO Certification
State Bank of India (SBI) First to introduceMutual Fundsin India
Bank of India First to openoverseas branch
ICICI Bank Firstuniversal bankin India; First to offerInternetBanking
HSBC First to introduceATM(1987, Mumbai)
Digibank (DBS) First fullydigital-only bank
Prathama Bank FirstRegional Rural Bank(Sponsored by SyndicateBank)
IDFC & Bandhan Bank First to get'in-principle' licensesas new banks
Grindlays Bank First to introduceMerchant Banking
ICICI Bank First to useBlockchain technologyin India
Citi Bank First to introduceVoice Biometric Authentication
HDFC Bank First to useRobotsin banking
🧾 Summary
● Indian bankinghas evolved from ancientmoney lendingsystemsto a robust modern structure
comprisingcentral, commercial, cooperative, rural,and digital banks.
● W
ith significantfirstsandtechnological innovations,India continues to lead in inclusive banking and
digital transformation.
