BANKING AND FINANCE IN INDIA
The Indian money market is classified in to : the organized sector(comprising private, public and foreign owned commercial banks and cooperative banks, together knownas scheduled banks); and the unorganized sector(comprising individual or familyowned indigenous bankers or money lenders and non banking financial companies(NBFCs)).The unorganized sector and micro credit and still preferred over traditional banks inrural and sub-urban areas, especially for non-productive purposes, like ceremoniesand short duration loans.
Banking in India
originated in the first decade of 18th century. The first banks wereThe General Bank of India, which started in 1786, and Bank of Hindustan, both of which are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the "The Bank of Bengal" in Calcutta in June 1806. Thiswas one of the three presidency banks, the other two being the Bank of Bombay andthe Bank of Madras. The presidency banks were established under charters from theBritish East India Company. They merged in 1925 to form the Imperial Bank of India,which, upon India's independence, became the State Bank of India. For many yearsthe Presidency banks acted as quasi-central banks, as did their successors. TheReserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve Bank wasnationalized and given broader powers.
The partition of India in 1947 adversely impacted the economies of Punjab and WestBengal, paralyzing banking activities for months. India's independence marked theend of a regime of the Laissez-faire for the Indian banking. The Government of Indiainitiated measures to play an active role in the economic life of the nation, and theIndustrial Policy Resolution adopted by the government in 1948 envisaged a mixed