The history of Indian banks dates back to the 18th century when the first modern bank, Bank of Hindustan, was established in Calcutta in 1770. However, it was the establishment of the Presidency Banks, the British East India Company established three banks: Bank of Bengal in 1809, Bank of Bombay in 1840, and Bank of Madras in 1843. These banks were merged in 1921 to form the Imperial Bank of India, which later became the State Bank of India in 1955.

In the early 20th century, several Indian-owned banks were established, including the Allahabad Bank, Punjab National Bank, and Bank of India. The Reserve Bank of India (RBI) was established in 1935 as the central bank of India, which played a key role in regulating and supervising the banking industry. During the pre-independence period, the banking sector in India was dominated by foreign banks. However, in 1935, the Reserve Bank of India (RBI) was established as the central bank of India to regulate the country’s monetary policy and control the banking sector.

After India gained independence in 1947, the government took steps to nationalize the banking industry. In 1955, the Imperial Bank of India was nationalized and renamed as the State Bank of India (SBI). In 1969, 14 major commercial banks were nationalized, including Punjab National Bank, Bank of India, and Canara Bank. This move aimed to promote social welfare and economic development in the country.  In 1969, 14 major private banks were nationalized, followed by six more in 1980. This led to the creation of public sector banks, which were owned by the government.

In the 1990s, India’s banking industry underwent significant changes as a result of economic liberalization policies. Private sector banks were allowed to enter the market, leading to the establishment of new banks such as HDFC Bank, ICICI Bank, and Axis Bank. The introduction of technology in banking services also revolutionized the banking industry. In the 1990s, the Indian government initiated economic reforms, which led to the liberalization of the banking sector. This led to the entry of private sector banks, which competed with public sector banks. The banking sector in India has since then undergone significant changes, and India’s banking sector has become one of the fastest-growing in the world.

Today, India’s banking sector is diverse and comprises public sector banks, private sector banks, foreign banks, regional rural banks, and cooperative banks. The RBI continues to regulate the banking sector in India, and the country has one of the largest banking networks in the world. The banking industry has played a significant role in India’s economic growth and development over the years.