Indian Banking industry has undergone a gamut of transition phases since their birth. In this article, we have provided the reader with the different phases of revolution that the Indian Banking industry has gone under. We have done this by explaining stages of revolution which took place in the Indian Banking Industry:
The History:
The initiators in the banking industry was the The General Bank of India, which started in 1786 and Bank of Hindustan, which started in 1790; both of which are not functioning now. The next in the line was the State Bank of India. The third one in the league of three presidency banks were Bank of Bombay and the Bank of Madras. These were all established by the British East India Company and acted as quasi-central banks
The Nationalization:
India`s central bank, The Reserve Bank of India was nationalized on January 1, 1949 under the terms of the Reserve Bank of India Act,1948. In spite of the provisions, control and regulations of RBI, many of the banks except State Bank of India continued to be ruled and operated by private persons. Later, The Government of India passed an ordinance and nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969. The second phase of nationalization of 6 more commercial banks was followed in 1980. After Nationalization, another phase followed which was Liberalization.
The Liberalization:
The phase was embarked upon by the Narasimha Rao government in the early 1990s. He licensed small number of private banks which became well known as the tech-savvy banks. The banks in this category included which later amalgamated with Oriental Bank of Commerce, Axis Bank (earlier as UTI Bank), ICICI Bank and HDFC Bank.
From there on, the Indian Banking industry has never seen a backward move. There has been a strong contribution from all three sectors of the banks namely government banks, private banks and foreign banks and so on.
It is said in the media reports that the growth in the banking industry is that of qualitative in nature and the banking industry in the years to come is expected to grow that way.
