Old Private Sector Banks

Old Private Sector Banks are private banks that were established before the nationalisation of banks in 1969 and continue to operate in India today. These banks form a distinct category recognised by the Reserve Bank of India (RBI) and play a crucial role in regional banking and financial inclusion.

Historical Background

Prior to independence and bank nationalisation, India’s banking system was dominated by privately owned banks serving trade, agriculture, and local communities. When major banks were nationalised in 1969 and 1980, a few private banks were allowed to continue due to their sound financial position, regional importance, and efficient management. These banks are now collectively referred to as Old Private Sector Banks.

Regulatory Classification

The RBI classifies private sector banks into:

• Old Private Sector Banks (established before 1991 reforms)
• New Generation Private Sector Banks (licensed after 1993–94 reforms)

Old private banks operate under the same regulatory framework as other scheduled commercial banks but retain their traditional banking character.

Key Characteristics of Old Private Sector Banks

• Established before bank nationalisation
• Strong regional and community-based presence
• Conservative lending and risk management practices
• High dependence on MSME, agriculture, and retail customers
• Gradual transition towards digital banking
• Lower scale compared to new private banks, but stable operations

List of Old Private Sector Banks in India (Still Operating)

City Union Bank

Founded in 1904, City Union Bank is one of the oldest private banks in India. Headquartered in Tamil Nadu, it has a strong focus on MSMEs, traders, and retail customers.

Federal Bank

Established in 1931 and headquartered in Kerala, Federal Bank is well known for NRI banking, remittances, and forex services, with a growing pan-India footprint.

Karur Vysya Bank

Founded in 1916, Karur Vysya Bank has traditionally supported traders and small industries, especially in southern India, and is known for MSME lending.

Karnataka Bank

Established in 1924, Karnataka Bank has a strong presence in South India and provides retail, corporate, and agricultural banking services.

South Indian Bank

Founded in 1929, South Indian Bank has an extensive branch network in southern India and plays a key role in retail and priority sector lending.

Tamilnad Mercantile Bank

Established in 1921, this bank is known for strong capital adequacy and prudent banking practices, with concentration in Tamil Nadu.

CSB Bank

Founded in 1920 as Catholic Syrian Bank, CSB Bank is headquartered in Thrissur, Kerala, and focuses on retail, SME, and gold loans.

DCB Bank

Established in 1930, DCB Bank has evolved into a modern private bank with focus on retail banking, MSMEs, and niche lending segments.

Dhanlaxmi Bank

Founded in 1927, Dhanlaxmi Bank operates mainly in southern India and focuses on regional banking and priority sector lending.

Nainital Bank

Established in 1922, Nainital Bank is a subsidiary of State Bank of India and has a limited but important regional presence.

Jammu and Kashmir Bank

Founded in 1938, J&K Bank holds a unique status—classified as a private bank by RBI, yet with majority government ownership.

Role in Indian Banking System

Old Private Sector Banks play a vital role by:

• Supporting local trade, MSMEs, and agriculture
• Promoting financial inclusion in semi-urban and rural areas
• Acting as stable regional banking institutions
• Complementing public sector and new private banks
• Their close customer relationships and local knowledge remain key strengths.

Old Private Sector Banks represent the legacy segment of India’s banking system. Despite competition from larger and technology-driven banks, they continue to remain relevant due to their regional strength, conservative approach, and deep-rooted customer relationships.