Banking Growth
CHAPTER V
PROGRESS OF THE BANKING SECTOR IN INDIA AND THE UNION TERRITORY OF PONDICHERRY.
5,l Introduction
Banks constitute an important segment in financial arena of all countries whether developed or developing or underdeveloped. Economic development of every country depends upon financial sector particularly commercial banks. In fact economic development and financial infrastructure go hand in hand. From time immemorial, the conventional banker, an indispensable pillar of Indian society, giving and taking of credit in one form or another, must have existed as earlier as the Vedic period. Money lending was one of the recognised occupations under Manu's laws'
.
The history of modem Indian banking2 goes back to 1683 when the first
Indian Bank was established on western lines in Madras. The establishment of the Bank
of Calcutta in 1806 marked the beginning of the modern banking era in India. Two more
Presidential Banks, namely, Bank of Bombay and Bank of Madras were set up in 1840
and 1843 respectively. With the launching of Swadeshi movement in 1905, there were outbursts of banking activities. Many banks like Bank of Burma (1904), Bank of India
(1906), Canara Bank (1906), Bank of Rangoon (1906), Indian Specie Bank (1906),
N.K. Thingalaya, "Manu, Chanakya and the Rate of Interest", Pigmy Economic Review, Vol. 36, Aug - Oct, 1994, pp. 1-5..
1
'c. Kugumakara Hebbar, "Growth of Banking in India Before Independence",
Pigmy Econgmic Review, August 1989, pp .3-4.
Indian Bank (1 9061, Bank of Baroda (1908) and Central Bank ( 1911) had their operation with a paid up capital of Rupees Five lakhs and above. But the present Indian banking system had developed considerably since 1935. RBI has started its operation in 1935 through an Act. A critical review of the growth of banking in India in the preindependence period reveals that the banking system had neither a definite shape nor policy except the creation of RBI in 1935. With the
PROGRESS OF THE BANKING SECTOR IN INDIA AND THE UNION TERRITORY OF PONDICHERRY.
5,l Introduction
Banks constitute an important segment in financial arena of all countries whether developed or developing or underdeveloped. Economic development of every country depends upon financial sector particularly commercial banks. In fact economic development and financial infrastructure go hand in hand. From time immemorial, the conventional banker, an indispensable pillar of Indian society, giving and taking of credit in one form or another, must have existed as earlier as the Vedic period. Money lending was one of the recognised occupations under Manu's laws'
.
The history of modem Indian banking2 goes back to 1683 when the first
Indian Bank was established on western lines in Madras. The establishment of the Bank
of Calcutta in 1806 marked the beginning of the modern banking era in India. Two more
Presidential Banks, namely, Bank of Bombay and Bank of Madras were set up in 1840
and 1843 respectively. With the launching of Swadeshi movement in 1905, there were outbursts of banking activities. Many banks like Bank of Burma (1904), Bank of India
(1906), Canara Bank (1906), Bank of Rangoon (1906), Indian Specie Bank (1906),
N.K. Thingalaya, "Manu, Chanakya and the Rate of Interest", Pigmy Economic Review, Vol. 36, Aug - Oct, 1994, pp. 1-5..
1
'c. Kugumakara Hebbar, "Growth of Banking in India Before Independence",
Pigmy Econgmic Review, August 1989, pp .3-4.
Indian Bank (1 9061, Bank of Baroda (1908) and Central Bank ( 1911) had their operation with a paid up capital of Rupees Five lakhs and above. But the present Indian banking system had developed considerably since 1935. RBI has started its operation in 1935 through an Act. A critical review of the growth of banking in India in the preindependence period reveals that the banking system had neither a definite shape nor policy except the creation of RBI in 1935. With the