Podcast
Questions and Answers
Which bank was the first in India to introduce the ATM?
Which bank was the first to issue credit cards in India?
What is the name of the first Digital Bank in India?
Which was the first bank to introduce saving accounts in India?
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Which bank was the first to introduce mutual funds in India?
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What defines Scheduled Banks in India?
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What does the Banking Companies Act of 1949 define as banking?
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Which type of bank is categorized under Scheduled Commercial Banks?
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What is the ownership structure of Public Sector Banks in India?
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Which of the following banks was established first in India?
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Which of the following is NOT a type of Scheduled Commercial Bank?
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During which phase did the nationalization of banks in India occur?
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What is the primary purpose of Commercial Banks in India?
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Which committee's recommendation led to the formation of Regional Rural Banks in India?
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In which year were licenses given to 10 private banking entities by the Reserve Bank of India?
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What major change in banking occurred in India during the III Phase (1991 & beyond)?
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Which of the following banks is NOT one of the original three banks that merged to form the Imperial Bank?
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What challenge do private sector and foreign banks currently face in India?
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Study Notes
Banking in India
- Banking in India can be traced back to the Vedic era.
- The Bank of Hindustan, established in 1770, is considered the first bank in India.
- The Bank of Bengal, Bank of Bombay, and Bank of Madras were merged to form the Imperial Bank in 1921, which was later taken over by SBI in 1955.
Pre-Independence Era
- The pre-independence phase saw the establishment of several banks, including Allahabad Bank (1865), Punjab National Bank (1894), Bank of India (1906), Bank of Baroda (1908), and Central Bank of India (1911).
Post-Independence Era (1947-1991)
- Nationalization of banks was a significant development in this period.
- The Central Bank of India was nationalized on 1st January 1949.
- The Regional Rural Banks were established on 2nd October 1975, following the recommendations of the Narsimha Committee.
Beyond 1991
- The year 1991 marked a shift towards liberalized economic policies, leading to an era of growth and consolidation in the banking sector.
- The Reserve Bank of India (RBI) granted licenses to 10 private entities, including ICICI, Axis Bank, HDFC, DCB, and IndusInd Bank.
Scheduled Banks
- Scheduled banks are those banks that are included in the Second Schedule of the Reserve Bank of India (RBI) Act of 1934.
- Commercial banks and cooperative banks are classified as scheduled banks.
- Commercial banks operate on a profit basis and are regulated under the Banking Regulations Act of 1949.
- Scheduled commercial banks are categorized into four types:
- Public Sector Banks
- Private Sector Banks
- Foreign Banks
- Regional Rural Banks
Non-Scheduled Banks
- Non-scheduled banks are those that are not mentioned in the Second Schedule of the RBI Act of 1934.
Classifications of Banks
- Public Sector Banks: Owned by the government with a majority stake (over 51%).
- Private Sector Banks: Owned by private individuals or institutions.
- Regional Rural Banks (RRBs): Established to serve the rural sector and operate under government control.
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Development Banks: Focus on specific sectors, including:
- Industrial Finance Corporation of India (IFCI), established in 1948.
- Export-Import Bank of India (EXIM Bank), established in 1982.
- National Bank for Agriculture & Rural Development (NABARD), established in 1982.
- Small Industries Development Bank of India (SIDBI), established on 2nd April 1990.
Firsts in Indian Banking System
- First bank in India: Bank of Hindustan (1770)
- First bank managed by Indians: Oudh Commercial Bank
- First bank with Indian capital: Punjab National Bank (founded by Lala Lajpat Rai)
- First foreign bank in India: HSBC
- First bank to receive ISO certification: Canara Bank
- First Indian bank outside India: Bank of India
- First bank to introduce ATMs: HSBC (1987, Mumbai)
- First bank to have a joint-stock public bank: Allahabad Bank
- First Universal bank: ICICI (Industrial Credit and Investment Corporation of India)
- First bank to introduce saving accounts: Presidency Bank (1833)
- First bank to introduce the cheque system: Bengal Bank (1833)
- First bank to provide internet banking: ICICI
- First bank to sell mutual funds: State Bank of India
- First bank to issue credit cards: Central Bank of India
- First Digital Bank: Digibank
- First Rural Regional Bank (Grameen Bank): Prathama Bank (sponsored by Syndicate Bank)
- First banks to receive 'in principle' banking licenses: IDFC and Bandhan Bank
- First bank to introduce merchant banking in India: Grindlays Bank
- First bank to introduce blockchain technology: ICICI
- First bank to introduce voice biometrics: Citi Bank
- First bank to introduce robots in banking services: HDFC
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Description
This quiz covers the evolution of banking in India from the Vedic era to the post-liberalization period. It highlights key milestones such as the establishment of major banks and the nationalization movement, providing a comprehensive understanding of the banking sector's history. Test your knowledge of Indian banking history and significant developments across different eras.
