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Introduction to Banks

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All you Need to know About Banks

When we think of a bank, immediately we will get an image of money in our minds. Yes, a bank is a financial institution or a platform that collects and accepts deposits from the public and converts those deposits into different landing activities. The activities include giving loans, investing in capital markets, mutual funds etc. All these can be done directly or indirectly. This is all we know. Let's try to get in-depth knowledge about banks with this introduction to banks. First, what is the history of banking in India, different types of banks, functions of various Banks etc.?


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History of Banking in India 

In the aspect of introduction to banks, it is good to know when the banking system was started, which was the first bank etc. To find out the answers to all these questions, let's look into the history of banking in India

To give support to the economy of India, the introduction to Banks happened in 1770, before independence itself. The first 

The bank was the "Bank of Hindustan" in Calcutta, the capital of India during that time. In India, around 600 banks were established before independence. But many of them were not in operation for long years. The surviving banks are as follows- 

  • The General Bank of India (1786-1791)

  • Bank of Bengal (1809)      

  • Bank of Bombay (1840)    

  • Bank of Madras (1843)

  • Oudh Commercial Bank (1881-1958)

Among these banks, the East India Company had established three banks. Namely - Bank of Bengal, Bank of Madras and Bank of Bombay. These are under the management of the British government and are known as presidential banks. 

After a few years, the three presidential banks decided to merge and forward a new bank called the Imperial Bank of India. As it did happen in 1921, we can say that the Imperial Bank of India was established in 1921. Another interesting fact of Imperial Bank of India is it is still in operation by changing its name to the state bank of India.

Along with the Imperial Bank of India, let's have a glance at the list of banks established during the pre-independence and post-independence periods. 

Banks Before Independence:- 

  • Allahabad Bank - 1865

  • Punjab National Bank - 1894

  • Bank of India - 1906

  • Canara Bank - 1906

  • Bank of Baroda - 1908

  • Central Bank of India - 1911

Banks After Independence:- 

  • Allahabad Bank               

  • Bank of India                          

  • Bank of Baroda

  • Bank of Maharashtra 

  • Andhra Bank

  • Corporation Bank

  • New Bank of India

  • Oriental Bank of Comm.

  • Punjab & Sind Bank

  • State Bank of Patiala 

  • State Bank of Hyderabad 

  • State Bank of Bikaner & Jaipur 

  • State Bank of Mysore 

  • State Bank of Travancore 

  • State Bank of Saurashtra 

  • State Bank of Indore

  • Vijaya Bank         

  • Central Bank of India

  • Canara Bank         

  • Dena Bank

  • Indian Overseas Bank

  • Indian Bank

  • Punjab National Bank                         

  • Syndicate Bank             

  • Union Bank of India

  • United Bank 

  • UCO Bank etc. 

In the history of banking in India, many changes had taken place after independence and with developed technology. 


Types of Banks 

Based on the functions, locality banking services can be divided into different types. They are as follows - 

Central Banks:- Among all types of banks, the central banks are the top-notch banks in any country. Eat the acts as the head of all other subsidiary banks. The Reserve Bank of India is our central bank. Its functions are- currency printing, supplying, managing, monitoring the subsidiary banks, being involved in foreign exchange etc. 

Commercial Banks:- Commercial banks are another type of which concentrate on purely collecting deposits and lending money to the investors and public as well, especially for business purposes. Simply, it is like a funding platform—HDFC, HSBC, Axis Bank, Canara bank etc. We have two different types of commercial banks. 

  • Scheduled banks

  • Non- scheduled banks

Investment Banks:- Investment banks are purely related to trading activities. They give funds to purchase the stocks, get repayments of loans from the capital etc. 

Cooperative Banks:- From all types of banks, these cooperative banks are considered non-profitable agencies that the depositors purely own. Whatever the amount acquired in the form of deposits can be reused to provide loans, online properties, movable and immovable things etc., for the regular usage of the public. 


Conclusion 

Hence it is clear that a bank is a financial intermediary which acts as a third person from a donor to a lender. Also, we come across different banks established before and after independence while discussing the introduction to banks. Also, we have gone through about four types of banks. All four types of banking products and services were unique.

FAQs on Introduction to Banks

1. What are the Features of Banking Systems?

Find the banking system is a financial discipline that takes care of all the financial activities that are carried out by the country. It acts as the foundation for the economy of that particular nation. In India, we have different types of Banks, and all are regularised under the Reserve Bank of India, which is our country’s central bank. The generalised characteristics of banks are as follows- 

  • All the banks may deal with the money either in the form of deposits or in the form of lending, investing options etc.

  • Providing loans is the major motor of any kind of bank. The loan size or structure may vary but giving a loan is the only objective. Education loan, occupation loan, home loan, car loan, agriculture loan etc.

  • Bank us as a middleman and bridge the gap between surplus funds to deficit funds. 

  • Besides all the services provided by banking institutions, every Bank runs for profit. So all these are commercial institutions.

2. What are the Advantages of a Bank?

The banks are very useful for mankind. We may get different types of benefits from different types of banks. That's the reason many banks were being established continuously. Some of those benefits are as follows- 

  • Safety is the basic advantage provided by every bank. We can keep our money, valuables etc. everything in the bank for extra protection.

  • Security, as the banks are maintaining high transparency and security, we have very few chances of malpractices.

  • We can deposit money in bank accounts and can save for future purposes. The banks are also encouraging us to invest from a minimum amount to a maximum amount.

  • By providing proper surety to the bank, we can avail of different types of loans with which we can reach our goals and implement ideas.

  • With the advanced technology, banking services became easy like online banking services, ATM services etc.