Timeline of Indian Banking: 1770–Present

The following list shows the timeline of banking in India, with major events and their dates.

• Ancient Era: c. 2000–500 BCE – References to money lending in Vedic texts; temples and financiers (shroffs) perform rudimentary banking functions.
• Medieval Era: 12th–16th centuries – Indigenous bankers (e.g., Seths, Chettiar, Marwari communities) thrive; use of Hundis (traditional credit notes) becomes common for trade.
• 1770: Bank of Hindustan established in Calcutta – first modern bank in India (European-run; closed by 1832).
• 1786: General Bank of India founded (first joint-stock bank; failed in 1791).
• 1806: Bank of Calcutta set up (renamed Bank of Bengal in 1809) – first of the Presidency Banks.
• 1840: Bank of Bombay established (2nd Presidency Bank).
• 1843: Bank of Madras established (3rd Presidency Bank).
• 1861: Paper Currency Act – note-issuing rights taken over by government; Presidency banks stop issuing their own notes.
• 1865: Allahabad Bank founded – one of the oldest joint-stock banks started by Indians (later became fully Indian-managed).
• 1881: Oudh Commercial Bank established – often cited as first Indian-owned commercial bank (founded in Faizabad).
• 1894: Punjab National Bank established in Lahore by Indian nationalists – grew into a leading Indian-managed bank.
• 1906–1911: Swadeshi era banks – formation of Bank of India (1906), Canara Bank (1906), Indian Bank (1907), Bank of Baroda (1908), Central Bank of India (1911), among others, by Indian promoters.
• 1921: Imperial Bank of India formed by merger of Bank of Bengal, Bombay, and Madras – becomes the premier bank of India.
• 1934: Reserve Bank of India Act, 1934 passed; sets up RBI as central bank.
• 1935: Reserve Bank of India starts operations (April 1) as India’s central bank.
• 1947: Independence of India; banking mostly in private hands, about 600 banks exist (many very small).
• 1949: RBI nationalized (Jan 1) – RBI becomes state-owned. Banking Regulation Act, 1949 – brings commercial banks under RBI’s regulatory ambit (licensing, supervision).
• 1955: State Bank of India formed (July) by nationalizing Imperial Bank via SBI Act; SBI to expand rural banking.
• 1959: SBI (Subsidiary Banks) Act – 8 former princely state banks become subsidiaries of SBI (later known as Associate Banks).
• 1960: Failure of Palai Central Bank and others; spurs creation of deposit insurance.
• 1962: Deposit Insurance introduced – Deposit Insurance Corporation established (operational from Jan 1, 1962) to insure bank deposits up to a certain limit. India is second country globally with a deposit insurance scheme.
• 1969: Nationalization of 14 major banks (July 19, 1969) – private banks each with >₹50 crore deposits nationalized by government. Marks start of “social banking” era.
• 1969: Lead Bank Scheme launched – each district allotted to a bank to lead branch expansion and credit planning.
• 1971: Establishment of Credit Guarantee Corporation to support credit to small industries (later merged into DICGC in 1978).
• 1975: Regional Rural Banks (RRBs) created (first RRB on Oct 2, 1975) under ordinance, later RRB Act 1976 – small local banks to serve rural credit needs.
• 1975: IDBI (Industrial Development Bank, est. 1964) converted to a principal financial institution for industries (later becomes a bank in 2004). Also formation of other DFIs (development finance institutions) in 1970s for specialized sectors.
• 1980: Nationalization of 6 banks (April 1980) – second wave of bank nationalization, bringing total PSBs to 20. Government now owns ~90% of banking assets.
• 1982: NABARD established (July 12) as apex body for rural and agricultural credit, via NABARD Act 1981. Also EXIM Bank set up in 1982 for export-import finance.
• 1985: Introduction of Lead Bank rural branch license policy (1:4 ratio for branch opening) – accelerates rural branch penetration in late ‘80s.
• 1988: National Housing Bank (NHB) set up as apex housing finance institution (subsidiary of RBI, later owned by GoI).
• 1991: Economic Liberalization begins. Narasimham Committee I appointed (Aug 1991) on Financial System reforms.
• 1991: India faces balance of payments crisis; government pledges to reform financial sector for efficiency.
• 1992: Narasimham Committee I Report – recommends wide-ranging banking reforms (published Dec 1991, actions start 1992). Key early reforms (1992–93): phased reduction of SLR/CRR, introduction of 8% capital adequacy norm, new prudential norms for asset classification and provisioning, permission for new private banks, interest rate deregulation (gradual).
• 1993: New Private Banks licensing – RBI invites applications; 10 licenses issued by 1994. Notable launches: HDFC Bank (1994), ICICI Bank (1994; ICICI Ltd converts to bank in 2002), UTI Bank/Axis (1994), IndusInd (1994) etc. First private banks in India since 1940s.
• 1994: Board for Financial Supervision set up under RBI to strengthen bank supervision.
• 1995: Banking sector sees improvement – most PSBs turn profitable after a span of losses. Stock market scam of 1992 (Harshad Mehta) leads to tighter controls on bank investment portfolios.
• 1997: Narasimham Committee II appointed to deepen reforms (Dec 1997).
• 1998: Narasimham Committee II Report – suggests further measures: bank mergers into strong institutions, raising CRAR to 9%, tackling NPAs via SARFAESI Act (2002) enabling asset reconstruction, reducing govt stake to 33%, professionalizing boards. Also recommends Floating a Global Trust Bank (which came earlier in 1994, but later failed in 2004).
• 1998: RBI grants higher autonomy to strong PSBs; categories of banks for autonomy introduced.
• 2000: Introduction of KYC (Know Your Customer) norms for banks to prevent money laundering.
• 2002: SARFAESI Act passed – empowers banks to seize collateral assets of defaulted loans without court intervention (key NPA resolution tool). Asset Reconstruction Companies (ARCs) emerge (ARCIL set up 2003).
• 2004: Basel II norms adopted in principle; to be implemented by banks over next few years (focus on risk management, capital for operational risk).
• 2008: Global Financial Crisis – Indian banks largely stable due to conservative policies, though credit growth slows. Govt infuses capital in some PSBs to maintain capital ratios.
• 2010: RBI introduces Base Rate system, replacing prime lending rate – to ensure transparency in loan pricing.
• 2010: Launch of IMPS (Immediate Payment Service) for 24×7 instant mobile payments – one of the first such systems globally.
• 2014: Two new full-service private banks licensed after a long gap – Bandhan Bank (focused on microloans) and IDFC Bank (infrastructure lending background). Marks revival of licensing for fit & proper entities.
• 2014: Pradhan Mantri Jan Dhan Yojana (PMJDY) – massive drive to open basic zero-balance accounts for the unbanked; over 400 million accounts opened, leveraging Aadhaar (identity) and mobile tech.
• 2015: RBI approves Payments Banks (11 licenses granted; e.g., Airtel, Paytm, India Post) and Small Finance Banks (10 licenses; e.g., Ujjivan, AU Bank) – new categories to further financial inclusion. First SFBs and payments banks start operations in 2016-17.
• 2016: Demonetisation (Nov 2016) – ₹500/₹1000 notes withdrawn, causing huge surge in bank deposits and digital transactions. Banks instrumental in currency exchange and promoting digital payments post-demo. UPI usage skyrockets thereafter.
• 2016: Insolvency and Bankruptcy Code (IBC) enacted – creates a time-bound insolvency resolution process via NCLT. Banks start using IBC to resolve large corporate NPAs (notably after RBI’s 2017 directives on NPAs).
• 2017: Major PSB Merger – SBI merges its 5 associate banks and Bharatiya Mahila Bank, cementing SBI’s position among global top 50 banks by assets.
• 2018: Prompt Corrective Action (PCA) invoked on several weak PSBs due to high NPAs; government launches recapitalization program ~₹2 trillion to strengthen PSB balance sheets.
• 2019: Consolidation of Nationalized Banks – Government merges 10 PSBs into 4 (effective April 2020). For example, PNB absorbs OBC and United Bank; Canara absorbs Syndicate; Union Bank absorbs Andhra & Corporation; Indian Bank absorbs Allahabad Bank. This reduces number of PSBs to 12, aiming for economies of scale.
• 2020: COVID-19 pandemic – RBI announces moratorium on loan EMIs, liquidity support measures. Digital banking and contactless payments surge during lockdowns. Banking sector shows resilience with regulatory support.
• 2021: Privatization agenda – Govt announces intent to privatize two public sector banks (as of 2025, one small PSB, IDBI Bank, is in process of privatization).
• 2022: Implementation of Basel III largely achieved (capital and liquidity norms). RBI launches Digital Rupee (CBDC pilot), signaling next frontier of banking tech innovation.
• 2023: Indian banking system strong in profitability and capital; focus shifts to fintech collaborations, customer experience, and further financial inclusion into underserved areas.