History of the Banking System development, how it come into the world
- Banking System , Bank is a financial institution, work as the safe keeper , withdrawal of money, advance money deposit, credit creation etc.
- The Bank term arrived from Italian word banco means bench.
- Jews were transferring transacting the service of money to other people.
- Jews used to start this banking practise as they collect money from rich people to keep it safe and give to poor people at interest accordingly.
- When they did not able to return the money to the rich people then they used to break the bench (bankrupt) in common it is (bankrupt).
Bank promises buildings behaviorism, India
Sahukar was unorganised banking system and thus practice later, banking sector was developed. In kautilya Arthshastra the first traces of banking used to found.
In 1600 the britishers came in india and they replaced sahukar with the well synchronised banking system/ sector.
Pre Independence period banking system
- Establishment of the general banking system in India by the britisher in 1786.
- Bank of the calcutta 1806 they have established and bear a power to print currency since 1823. Which were later known as the State bank of India.
- Presidency banks they established 1840 in the Bombay and Madras 1843 as they has the power to issuing the currency since 1823.
- Not only depositing and advancing the money but also gives power as like central banking i.e. power. and futher it known as SBI.
- Union bank of india 1839 they set up in the central region of India.(MP)
- To set up bank in the north side they set Allahabad bank of india 1840.
Banking System established post Independence of India
Generally 3 phrases are, there Banking System established post Independence of India
- Formation
- Nationalization
- Liberalisation
But behalf of this their were 5 Phrases more important
- Foundation phrase(1949-1969)
- Expansion phase(1969-1984)
- Consolidation (1984-1990) Nationalisation.
- Reformatory phrase(1991- on words)
- Present reforms(2014- on words)
Formation of Banking System in India(1949-1969)
Banking regualation Act 1949
By this regulation RBI was formed and banking system was waved out. RBI = financial system, SEBI= If any company work as joint stock company it was guided with SEBI. Imperial bank of indian = SBI
SBI was established as the subsidary to RBI. And for to cover North area the Allahabad bank are become the subsidary bank to the State Bank of India.
Rural committee
The Rural credit scheme committee was made to seach that is rural people is capable to manage or only financial assistance will be needed or not. Government say we have to collaborate the urban and rural area. by opening the branches.
Minimum requirement rule
If any bank want to establish to as bank then bank have to total fund of 3% they have to credit in rural india, then only financial sector all have effort to development and heirs employee.
Banking system Expansion phase
Social orientation policy: The aim of this policy is to bring equality between in the urban and rural area, for this, then government make ratio which they have to credit according to the ratio set as in “urban minimum 67% and in the rural 33%.
RBI was empowered in banking system
Due to development in the bank sector Rbi had further expanded their area in the field of two other bifurcation are as 1. Corporate bank and 2. regional rural bank.
Nationalisation of Banking system in India
After the development of banking sector in the rural and urban sector Government started Nationalisation of Banks of the development and to encourage people of rural sector to more participation in the bank and for monetory deposition which effect in the development boost of the country economy.
The government came and take 51% of share in the its hand of the bank which were later functioning as the private bank and was in the private player.
The government has nationalised of 14 banks in that period and futher it added 6 more banks.
Induction and trading programmes
To make relation with customers, On bording of the new working force and adjusting to work in the environment and it is the responsibility as of the resource of human.
The hybrid system of Banking in consolidated bank means managing two different bank like public and private bank.
Foreign bank :- Incorporated in foreign country they open branches in several country. Example: standard charter bank.
Consolidation passes
This policy Consolidation, work for the merger of banks and amalgamation by the Reserve Bank of India in India.
Reformatory phase
Report of Narsimha committee this committee surveyed the entire Indian banking system by this committee the proposal liberation of bank must be there and licence should be issued.