Although money lending and other kinds of informal transactions existed during ancient and medieval times, banking in its modern sense originated in India only in the last decades of the 18th century.
It was the Bank of Hindustan that marked a beginning to the banking trend in 1770. The General Bank of India came later, in 1786, but it failed within five years. The Bank of Hindustan too closed down between 1829 – 32.
In spite of the initial failure, banking in the country flourished after the establishment of the three powerful banks -the Bank of Bengal in 1806, the Bank of Bombay in 1840, and the Bank of Madras in 1843. These were the Presidency banks that later merged to form the Imperial Bank of India in 1921.
Upon the Independence, it was subsequently transformed into the State Bank of India that we now have, the oldest and the largest bank in the country.
Another major step was the establishment of the Reserve Bank of India in 1935. Its main functions were to issue bank-notes, and maintain monetary stability in the country.
Nationalization of banks happened years later, when the government nationalized 14 private banks in 1969 as the first phase and six more in the second phase of 1980. The years that followed saw the emergence of regional rural banks, foreign banks, and other private sectors banks in India. As of 2016, there are 27 public sector banks out of which 19 are nationalized and six are the State Bank of India along with its associate banks.
There is also a Bharatiya Mahila Bank that functions exclusively to help women. Other than these, there are 93 commercial banks.
