A History of Banking
India's Presidency Banks and the Imperial Bank
How British India's presidency banks in Calcutta, Bombay and Madras merged into the Imperial Bank of India in 1921, which became the State Bank of India in 1955.
Modern banking in India developed under colonial rule.
Presidency banks
- Bank of Calcutta (1806, later Bank of Bengal).
- Bank of Bombay (1840).
- Bank of Madras (1843).
- They issued notes and acted as bankers to government.
Imperial Bank
In 1921, the three merged to form the Imperial Bank of India.
State Bank of India
- In 1955, the Imperial Bank was nationalised and renamed the State Bank of India (SBI), recommended by the Gorwala Committee to expand rural banking.
- SBI became India’s largest bank.
Indian banks
- Indian-owned banks like Punjab National Bank (1894) and Bank of India (1906) grew, partly driven by the Swadeshi movement.
Failures
Many small banks failed before independence, as regulation was weak.
RBI
The Reserve Bank of India was established in 1935.
The oldest bank
SBI traces its roots to the Bank of Calcutta, founded in 1806, making it one of India's oldest banking institutions.
Thinking SBI was created from scratch after independence
It grew from the presidency banks and Imperial Bank.
Key takeaways
- The presidency banks were founded in 1806, 1840 and 1843.
- They merged into the Imperial Bank in 1921.
- It became SBI in 1955.
- Swadeshi-era banks like PNB grew too.
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