Change is the only constant in the universe. Everything around us is constantly changing, you would always hear stories from elders about how things were different some years back.
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This theory stands true for banking as well. The evolution of banking systems have made banking simpler and can operate with a few clicks were very different a few decades back.
Let’s go back and see how banks operated before independence i.e., in the colonial era. Prior to independence in 1947, around 600 banks existed in India. The first ever bank being established in India was the Bank of Hindustan founded in 1770 in Calcutta. However, the bank halted its operations in 1832.
Now you will ask – Did banks exist before the Bank of Hindustan?
The answer to that question is ‘Yes’. The banking system has been in place since the stone age and has been through multiple changes and innovations since then. Initially, it just started off as a barter system and now banks have evolved to what it is now.
In India, post the independence, the government took banking reins into their own hand for the greater good of Indians.
All the banks in India post-independence were privately held which was a major concern for the government as most of the population was dependent on landlords for the debt.
Therefore, the Indian government decided to nationalise all these banks under the Banking Regulation Act, 1949.
Under this law, State Bank of India was formed in 1955 and 14 other banks were nationalised between 1969 and 1991.
To understand more about the evolution of banking watch this video of banking veteran himself – Mr. Mrutyunjay Mahapatra.