Historical development of Commercial Banks in India

Historical development of Commercial Banks in India:

• Bank of Hindustan was the first bank in India established in 1770.
• The General Bank of India was established in 1786
• Bank of Calcutta- 1806
• Bank of Bombay- 1840
• Bank of Madras- 1843
• First Indian bank which was administered by Indians was Oudh Bank in (1881)
• First Indian Bank which was purely started by Indians was Punjab National Bank (1894).
• Imperial Bank of India- 1921.It renamed into State Bank of India on July 1, 1955.

The Agricultural Refinance Development Corporation (ARDC):

• Agricultural Refinance Development Corporation (ARDC) was established by an Act of Parliament and it started functioning from July 1, 1963.

Objectives of ARDC:

• To provide necessary funds by way of refinance to eligible institutions such as the Central Land Development Banks, State Co-operative Banks, and Scheduled banks.

Regional Rural Banks (RRBs):

• The Government of India setup Regional Rural Banks (RRBs) in 1975
• The share capital of RRB is subscribed by the Central Government (50%), the State Government concerned (15%) and the sponsoring commercial bank (35%)

NABARD:

• A National Bank for Agriculture and Rural Development (NABARD), was therefore, set up in July 1982 by an Act of parliament to take over the functions of ARDC and the refinancing functions of RBI in relation to co-operative banks and RRBs.
• A Deputy Governor of RBI is appointed as Chairman of NABARD.

All – India Level Institutions:

1. Industrial Finance Corporation of India (IFCI)

• This was established on July 1, 1948 under the Act of the Parliament.

2. Industrial Credit and Investment Corporation of India (ICICI)

• This was set up on 5^th January 1955 as a joint-stock company on the advice given by a three-man mission sponsored by the World Bank and The Government of USA to the Government of India.

3. Industrial Development Bank of India (IDBI)

• The Development Bank was a wholly owned subsidiary of the Reserve Bank of India into February 15, 1976.
• It was delinked from the RBI with effect from February 16, 1976 and made an autonomous corporation fully owned by the Government of India.

State Level Institutions:

• State Financial Corporation(SFCs)
  • The government of India passed in 1951 the State Financial Corporation Act and SFCs were set up in many states.
• State Industrial Development Corporations (SIDCOs)