Banking Sector in India The Way Forward

What is it about?

The formal banking system started with establishment of General Bank of India 1786 followed by other banks which could not strive for long. The notable development in the history of the banking system in India took place with the establishment of the Bank of Bengal in 1806, Bank of Bombay in 1840 and the Bank of Madras in the year 1843. The Royal Commission on Indian Currency and Finance recommended creation of the Central Bank for control of currency as a result; the Reserve Bank of India established was in the year 1935. Post independence the Government enacted Banking Companies Act 1949 to regulate Banking business in India, which latter came to be known as the Banking Regulating Act 1949. The banking sector in the post Independence period was ruled by private Banking companies and the Government took the gallant decision to nationalize key private banks first through Ordinance and the latter through the Banking Companies (Acquisition and Transfer of Undertaking) Act 1969. The Government of India on the recommendation of the Narisimham Committee, introduced reforms in the banking sector and thus an era of liberation began in India.

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