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Home » Reserve Bank of India » Private Banks in India | ||||||||||||||
Private Banks in India |
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Initially all the banks in India were private banks, which were founded in the pre-independence era to cater to the banking needs of the people. In 1921, three major banks i.e. Banks of Bengal, Bank of Bombay, and Bank of Madras, merged to form Imperial Bank of India. In 1935, the Reserve Bank of India (RBI) was established and it took over the central banking responsibilities from the Imperial Bank of India, transferring commercial banking functions completely to IBI. In 1955, after the declaration of first-five year plan, Imperial Bank of India was subsequently transformed into State Bank of India (SBI). Following this, occurred the nationalization of major banks in India on 19 July 1969. The Government of India issued an ordinance and nationalized the 14 largest commercial banks of India, including Punjab National Bank (PNB), Allahabad Bank, Canara Bank, Central Bank of India, etc. Thus, public sector banks revived to take up leading role in the banking structure. In 1980, the GOI nationalized 6 more commercial banks, with control over 91% of banking business of India. |
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In 1994, the
Reserve
Bank of India issued a policy of liberalization to license limited
number of private banks, which came to be known as New Generation tech-savvy
banks. Global Trust Bank was, thus, the first private bank after
liberalization; it was later amalgamated with
Oriental Bank of Commerce (OBC).
Then Housing Development Finance Corporation Limited (HDFC) became the first
(still existing) to receive an 'in principle' approval from the
Reserve Bank
of India (RBI) to set up a bank in the private sector. |
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