Question

Write a short note on the evolution of banks in India.

Answer 1

Instructions:

• Explain about the events that happened during each phase of evolution of banks in India.

Solution:

• First phase (1770 to 1969):
  • The British East India Company established the Presidency banks, Bank of Bengal, Bank of Bombay, and Bank of Madras. Characterised by slow operations and growth.
• Second phase (1969 to 1990):
  • It focused on social progress and led to the nationalisation of 14 banks in 1969 and 6 banks in 1980.
  • The second phase witnessed rapid development of the banking sector.
• Third phase (1990 to current times):
  • The third phase witnessed the introduction of Automated Teller Machine (ATM), credit card, phone banking, net banking, core banking, etc.
  • The third phase also witnessed licence to private banks and started rendering various services.