History of Banking & Merger of Banks

Banking system commenced in India with the foundation of Bank of Hindustan in Calcutta (now Kolkata) in 1770 which ceased to operate in 1832.
Presidency Banks:
These banks were funded by the presidency government at that time.

• Bank of Bengal- Established in 1806.
• Bank of Bombay - Established in 1840.
• Bank of Madras - Established in 1843.

These three presidency banks were re-organized and amalgamated to form a single entity named “Imperial Bank of India” on 27th January, 1927. It was later transformed into “State Bank of India” in 1 July 1955.
Some old Banks:

• Allahabad Bank was established in 1865 at Allahabad (Uttar Pradesh). It is the oldest joint stock bank of our country functioning till today.
• Oudh Commercial Bank was established in 1881 at Faizabad (Uttar Pradesh).It is the First limited liability Bank in India and also first joint stock bank by Indians. However it failed in 1958.
• Punjab National Bank was established in 1895 at Lahore (pakistan) and it was also the first bank to be managed solely by Indians.

 Swadeshi movement:

• Due to the “Swadeshi” movement many banks were established between 1906 and 1911. Many local businessmen and strong political figures of India funded the banks for Indian community.

Some of the banks that were established are as follows:
 

Nationalization:
19th July 1969, 14 major Banks were nationalized.
1. Central bank India
2. Bank of Maharashtra
3. Dena Bank
4. Punjab national bank
5. Syndicate bank
6. United bank of India
7. Indian bank
8. Indian overseas bank
9. Bank of Baroda
10. Union bank
11. Allahabad bank
12. UCO bank
13. Canara bank
14. Bank of India
 

In 1980 another 6 banks were nationalized:
1. Andhra bank
2. Oriental bank of commerce
3. New bank of india
4. Corporation bank
5. Punjab and sind bank
6. Vijaya bank
There were 27 PSBs in 2017 and now there would be 12. This would result in creation of seven large PSBs with each amalgamated entity having a business of over Rs 8 lakh crore, and five smaller ones.
 

The five smaller PSBs are
1. Central Bank of India (CBI) [8th largest]
2. Indian Overseas Bank (IOB) [9th largest]
3. UCO Bank. [10th largest]
4. Bank of Maharashtra (BOM) [11th largest]
5. Punjab and Sind Bank [12th largest]
 

The seven large PSBs (by size) are
1. State Bank of India (SBI)
2. Punjab National Bank (PNB)
3. Bank of Baroda (BOB)
4. Canara Bank
5. Union Bank of India (UBI)
6. Bank of India (BOI)
 7. Indian bank

Recent merger announced by Finance ministry:

 The RBI has excluded six public sector banks, including OBC and Allahabad Bank, from the Second Schedule of the RBI Act following their merger with other banks. The six banks are Syndicate Bank, Oriental Bank of Commerce (OBC), United Bank of India, Andhra Bank, Corporation Bank, and Allahabad Bank.