INDIAN ECONOMY - BANKING SYSTEM

• Oudh Commercial Bank was established in 1881. It is the first commercial bank in India established by Indians.
• Punjab National bank was established in 1894.
• Narasimhan Committee was appointed on banking reforms.
• The 14 major banks were nationalised by the Government on July 19, 1969. Six Commercial banks were nationalised by the Government on April 15, 1980.
• Commercial Banks, Regional Rural Banks, Cooperative Banks are the Scheduled Banks. Scheduled Banks means the banks which come under the Schedule II of the RBI Act 1934.
• Imperial Bank of India was established on 27th January, 1921 by merging presidential banks. Imperial Bank of India was nationalised on July 1, 1955 and named it as State Bank of India.
• Reserve Bank of India was established on April 1, 1935. It was nationalised on 1 January, 1949. Reserve Bank of India performs central banking functions. Reserve Bank of India (RBI) follows the Minimum Reserves System in issuing currency since 1956. As per the Minimum Reserves System, Reserve Bank maintain Rs.200 Crores Gold and Foreign Currency (including minimum Gold of Rs.115 crores). Reserve Bank of India started the system of Ombudsman to resolve grievances of customers in 1995.
• The credit control methods adopted by the Reserve Bank are Quantitative controls and Qualitative controls. Bank Rate, Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Open Market Operations, are the quantitative techniques of RBI. Margins, Maximum limit of credit for specific purposes, Differential interest rates on certain types of advances are the qualitative control methods of RBI.
• NABARD is the apex institution for agriculture and rural development. NABARD (National Bank of Agriculture and Rural Development) was established on July 12, 1982. NABARD is the apex institution to provide credit facility to agriculture and rural development.
• Lead Bank system was started in 1969. Lead Bank system was started on the recommendations of Nariman Committee.
• Regional Rural Banks were established on October 2, 1975. The Regional Rural Banks (RRB) are established based on the recommendations of the Saraya Committee. Bhandar committee and K. Basu Committees were appointed by the Government for restructuring the Regional Rural Banks.
• Export and Import Bank of India (EXIM Bank) established in 1982.
• Industrial Financial Corporation of India was established in 1948.
• UTI Bank Ltd. is the first Private bank established based on the recommendations of the Narasimhan Committee. UTI Bank Ltd. was established in 1994.