The Banks of India

Banking in India forms the base for the country’s economic development. The history of banking in India dates back before India got her independence in 1947. The first bank, as may be recalled, of colonial India was the "Bank of Hindustan", established in 1770 and located in the then, Indian capital, Calcutta. However, this bank failed to work and ceased its operations in 1832.

When India got her independence in 1947, all the major banks of the country were led privately. This was a cause of concern as the majority of the Indians, especially those from the rural areas were dependent on money lenders for financial assistance. With an aim to solve this problem, the then Government decided to nationalize Indian banks. These banks were nationalized under the Banking Regulation Act, 1949. Over the years, Indian banking sector has witnessed major changes both in the banking system and the management with the advancement in technology, considering the needs of the people.

The Banking System of India

The banking system of India broadly consists of the commercial banks, the co-operative banks and the development banks or the development finance institutions. The commercial banks can be broadly divided into public sector, private sector and foreign banks. In Public Sector Banks the majority stake is held by the Government of India. After the recent amalgamation of smaller banks with larger banks, there are about 12 major Public Sector Banks in India as of now.
The banks affected by this merger are Dena Bank, Vijaya Bank, Corporation Bank, Andhra Bank, Oriental Bank of Commerce, United Bank, Syndicate Bank and Allahabad Bank.

1. Oriental Bank of Commerce and United Bank of India with Punjab National Bank,
2. Dena bank and Vijaya Bank with Bank of Baroda
3. Allahabad Bank and Indian Bank,
4. Syndicate Bank with Canara Bank,
5. Andhra Bank and Corporation Bank with Union Bank of India.

The banks that got merged, account number, IFSC, MICR code, branch address, cheque-book, passbooks will also undergo changes in respect to their mother bank to represent the new entity. Some merged banks have already announced that a big number of the branches from the merged banks will either be merged or be closed as the mother bank already operates in that locality.