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Banking in India From Wikipedia, the free encyclopedia

Structure of the organised banking sector in India. Number of banks are in brackets. Banking in India in the modern sense originated in the last decades of the 18th century. The first banks were and Bank of Hindustan (1770-1829) and The General Bank of India, established 1786 and since defunct. The oldest bank still in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India in 1955.

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1 History o 1.1 Colonial era o 1.2 Post-Independence o 1.3 Nationalisation in the 1960s o 1.4 Liberalisation in the 1990s o 1.5 Current period 2 Adoption of banking technology 3 Further reading 4 See also 5 References 6 External links History In ancient India there is evidence of loans from the Vedic period (beginning 1750 BC).[1][2] Later during the Maurya dynasty(321 to 185 BC), an instrument called adesha was in use, which was an order on a banker desiring him to pay the money of the note to a third person, which corresponds to the definition of a bill of exchange as we understand it today. During the Buddhist period, there was considerable use of these instruments. Merchants in large towns gave letters of credit to one another.[3] Colonial era During the colonial era merchants established the Union Bank of Calcutta in 1829, first as a private joint stock association, then partnership. Its proprietors were the owners of the earlier Commercial Bank and the Calcutta Bank, who by mutual consent created Union Bank to replace these two banks. In 1840 it established an agency at Singapore, and closed the one at Mirzapore that it had opened in the previous year. Also in 1840 the Bank revealed that it had been the subject of a fraud by the bank's accountant. Union Bank was incorporated in 1845 but failed in

1848, having been insolvent for some time and having used new money from depositors to pay its dividends.[4] The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India, it was not the first though. That honour belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla. Foreign banks too started to appear, particularly in Calcutta, in the 1860s. The Comptoir d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondicherry, then a French possession, followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking center. The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established inLahore in 1895, which has survived to the present and is now one of the largest banks in India. Around the turn of the 20th Century, the Indian economy was passing through a relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial and other infrastructure had improved. Indians had established small banks, most of which served particular ethnic and religious communities. The presidency banks dominated banking in India but there were also some exchange banks and a number of Indian joint stock banks. All these banks operated in different segments of the economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign trade. Indian joint stock banks were generally under capitalised and lacked the experience and maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon to observe, "In respect of banking it seems we are behind the times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome compartments." The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community. A number of

banks established then have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India. The fervour of Swadeshi movement lead to establishing of many private banks in Dakshina Kannada and Udupi district which were unified earlier and known by the name South Canara ( South Kanara ) district. Four nationalised banks started in this district and also a leading private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking". During the First World War (19141918) through the end of the Second World War (19391945), and two years thereafter until the independence of India were challenging for Indian banking. The years of the First World War were turbulent, and it took its toll with banks simply collapsing despite the Indian economy gaining indirect boost due to war-related economic activities. At least 94 banks in India failed between 1913 and 1918 as indicated in the following table: Years Number of banks Authorised capital Paid-up Capital that failed (Rs. Lakhs) (Rs. Lakhs) 274 710 56 231 76 209 35 109 5 4 25 1

1913 12 1914 42 1915 11 1916 13 1917 9 1918 7

Post-Independence The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralysing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included:

The Reserve Bank of India, India's central banking authority, was established in April 1935, but was nationalised on 1 January 1949 under the terms of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948 (RBI, 2005b).[5] In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India". The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI, and no two banks could have common directors.

Nationalisation in the 1960s Despite the provisions, control and regulations of Reserve Bank of India, banks in India except the State Bank of India or SBI, continued to be owned and operated by private persons. By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the nationalisation of the banking industry. Indira Gandhi, then Prime Minister of India, expressed the intention of the Government of Indiain the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalisation."[6] The meeting received the paper with enthusiasm. Thereafter, her move was swift and sudden. The Government of India issued an ordinance ('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969')) andnationalised the 14 largest commercial banks with effect

from the midnight of 19 July 1969. These banks contained 85 percent of bank deposits in the country.[6] Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969. A second dose of nationalisation of 6 more commercial banks followed in 1980. The stated reason for the nationalisation was to give the government more control of credit delivery. With the second dose of nationalisation, the Government of India controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalised banks and resulted in the reduction of the number of nationalised banks from 20 to 19. After this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy. Liberalisation in the 1990s In the early 1990s, the then Narasimha Rao government embarked on a policy of liberalisation, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, UTI Bank (since renamed Axis Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalised the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%,at present it has gone up to 74% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 464 method (Borrow at 4%;Lend at 6%;Go home at 4) of functioning. The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks.All this led to the retail boom in India. People not just demanded more from their banks but also received more.

Current period By 2010, banking in India was generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true. With the growth in the Indian economy expected to be strong for quite some timeespecially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect M&As, takeovers, and asset sales. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. In recent years critics have charged that the non-government owned banks are too aggressive in their loan recovery efforts in connection with housing, vehicle and personal loans. There are press reports that the banks' loan recovery efforts have driven defaulting borrowers to suicide.[7][8][9] Adoption of banking technology The IT revolution had a great impact in the Indian banking system. The use of computers had led to introduction of online banking in India. The use of the modern innovation and computerisation of the banking sector of India has increased many fold after the economic liberalisation of 1991 as the country's banking sector has been exposed to the world's market. The Indian banks were finding it difficult to compete with the international banks in terms of the customer service without the use of the information technology and computers.

Number of branches of scheduled banks of India as of March 2005 The RBI set up a number of committees to define and coordinate banking technology. These have included:

In 1984 formed the Committee on Mechanisation in the Banking Industry (1984)[10] whose chairman was Dr C Rangarajan, Deputy Governor, Reserve Bank of India. The major recommendations of this committee was introducing MICR technology in all the banks in the metropolis in India.[11] This provided use of standardized cheque forms and encoders. In 1988, the RBI set up the Committee on Computerisation in Banks (1988)[12] headed by Dr. C.R. Rangarajan which emphasized that settlement operation must be computerized in the clearing houses of RBI in Bhubaneshwar, Guwahati, Jaipur, Patna and Thiruvananthapuram. It further stated that there should be National Clearing of inter-city cheques at Kolkata, Mumbai, Delhi, Chennai and MICR should be made Operational. It also focused on computerisation of branches and increasing connectivity among branches through computers. It also suggested modalities for implementing online banking. The committee submitted its reports in 1989 and computerisation began from 1993 with the settlement between IBA and bank employees' association.[13] In 1994, Committee on Technology Issues relating to Payment systems, Cheque Clearing and Securities Settlement in the Banking Industry (1994)[14] was set up under chairman Shri WS Saraf. It emphasized Electronic Funds Transfer (EFT) system, with the BANKNET communications network as its carrier. It also said

that MICR clearing should be set up in all branches of all banks with more than 100 branches.

In 1995, Committee for proposing Legislation on Electronic Funds Transfer and other Electronic Payments (1995)[15] again emphasized EFT system.[13]

Number of ATMs of different Scheduled Commercial Banks of India as on end March 2005 Total numbers of ATMs installed in India by various banks as on end June 2012 is 99,218.[16] The New Private Sector Banks in India is having the largest numbers of ATMs which is followed by off-site ATMs belonging to SBI and its subsidiaries and then it is followed by New Private Banks, Nationalised banks and Foreign banks. While on site is highest for the Nationalised banks of India.[13]

Branches and ATMs of Scheduled Commercial Banks as on end March 2005[13] Number of branches 33627 On-site ATMs 3205 Off-site ATMs 1567 Total ATMs 4772

Bank type

Nationalised banks

States bank of India Old private sector banks New private sector banks Foreign banks Further reading

















The Evolution of the State Bank of India (The Era of the Imperial Bank of India, 19211955) (Volume III) Banking Frontiers a monthly magazine, published by Mumbai based Glocal Infomart. Editor

List of banks in India

From Wikipedia, the free encyclopedia

This is a partial list of corporations engaged in banking business within the territory of India. There are currently nationalised banks in India.

1 Public-sector banks 2 Public-sector banks - SBI and associate banks 3 Private-sector banks 4 Foreign banks operating in India 5 Foreign banks with business in India 6 Foreign banks with representative offices in India 7 Indian banks with business outside India 8 See also

9 References 10 External links



1. Allahabad Bank 2. Andhra Bank 3. Bank of Baroda 4. Bank of India 5. Bank of Maharashtra 6. Canara Bank 7. Central Bank of India 8. Corporation Bank 9. Dena Bank 10. IDBI Bank 11. Indian Bank 12. Indian Overseas Bank 13. Oriental Bank of Commerce 14. Punjab & Sind Bank 15. Punjab National Bank 16. Syndicate Bank 17. UCO Bank 18. Union Bank of India 19. United Bank of India 20. Vijaya Bank


banks - SBI and associate banks

State Bank of India Associate banks

1. State Bank of Indore (Merged with SBI in 2010) 2. State Bank of Travancore

3. State Bank of Bikaner & Jaipur 4. State Bank of Hyderabad 5. State Bank of Mysore



1. Axis Bank 2. Catholic Syrian Bank 3. City Union Bank 4. Development Credit Bank 5. Dhanlaxmi Bank 6. Federal Bank 7. HDFC Bank 8. ICICI Bank 9. IndusInd Bank 10. ING Vysya Bank 11. Jammu & Kashmir Bank 12. Karnataka Bank 13. Karur Vysya Bank 14. Kotak Mahindra Bank 15. Lakshmi Vilas Bank 16. Ratnakar Bank Limited 17. Saraswat Bank 18. South Indian Bank 19. Saurashtra Bank 20. Tamilnad Mercantile Bank Limited 21. Yes Bank


banks operating in India

1. ABN AMRO Bank N.V. (Now merged with RBS)(Applied for withdraw of Retail Bank License) 2. Abu Dhabi Commercial Bank 3. American Express Bank 4. Australia and New Zealand Bank 5. Bank Internasional Indonesia 6. Bank of America NA

7. Bank of Bahrain and Kuwait 8. Bank of Ceylon 9. Bank of Nova Scotia (Scotia Bank) 10. Bank of Tokyo Mitsubishi UFJ 11. Barclays Bank PLC 12. BNP Paribas 13. Calyon Bank 14. Chinatrust Commercial Bank 15. Citibank N.A. 16. Credit Suisse 17. Commonwealth Bank of Australia (Recently Launched Retail Services in Mumbai) 18. DBS Bank 19. DCB Bank now RHB Bank 20. Deutsche Bank AG 21. FirstRand Bank 22. HSBC 23. JPMorgan Chase Bank 24. Krung Thai Bank 25. Mashreq Bank psc 26. Mizuho Corporate Bank 27. Royal Bank of Scotland 28. Shinhan Bank 29. Socit Gnrale 30. Sonali Bank 31. Standard Chartered Bank 32. State Bank of Mauritius 33. UBS 34. VTB


banks with business in India

Banks with branches in India.[1] 1. ABN AMRO Bank N.V. - Royal Bank of Scotland 2. Abu Dhabi Commercial Bank

3. American Express Bank 4. Antwerp Diamond Bank 5. Arab Bangladesh Bank 6. Bank International Indonesia 7. Bank of America 8. Bank of Bahrain and Kuwait 9. Bank of Ceylon 10. Bank of Nova Scotia 11. Bank of Tokyo Mitsubishi UFJ 12. Barclays Bank 13. BNP Paribas 14. Calyon Bank 15. Chinatrust Commercial Bank 16. Citibank 17. DBS Bank 18. Deutsche Bank 19. HSBC (Hongkong & Shanghai Banking Corporation) 20. JPMorgan Chase Bank 21. Krung Thai Bank 22. Mashreq Bank 23. Mizuho Corporate Bank 24. National Australia Bank 25. Shinhan Bank 26. Socit Gnrale 27. Sonali Bank 28. Standard Chartered Bank 29. UBS


banks with representative offices in India

American Banks

American Express Bank of New York Wachovia Bank Northern Trust

Australian Banks

Commonwealth Bank Westpac Banking Corporation

Austrian Banks

Raiffeisen Zentralbank

Belgian Banks

Fortis Bank KBC Bank

Canadian Banks

Royal Bank of Canada

UAE Banks

Emirates Bank International

French Banks

Credit Industriel et Commercial Natixis

German Banks

HypoVereinsbank Commerzbank Dresdner Bank DZ Bank AG Deutsche Zentral Genossenschafts Bank HSH Nordbank Landesbank Baden-Wrttemberg

Irish Banks

Depfa Bank

Italian Banks

Banca Intesa Banca di Roma Banca Popolare di Verona Banca Popolare di Vicenza UBI Banca Monte dei Paschi di Siena Sanpaolo IMI UniCredit

Nepalese Banks

Everest Bank

Portuguese Banks

Caixa Geral de Depositos

Russian Banks

Vnesheconombank Promsvyazbank

South African banks

First Rand Bank

South Korean Banks

Woori Bank

Spanish Banks

Caixabank Banco de Sabadell Banco Bilbao Vizcaya Argentaria

Sri Lankan Banks

Hatton National Bank

Swiss Banks

Credit Suisse Zurich Cantonal Bank

Indian banks with business outside India

List of subsidiaries of Indian Banks abroad as on November 30, 2007:

Name of the Bank

Name of the Centre

Andhra Bank

Dubai, Malaysia

all india bank



Hongkong, Singapore,Dubai,Sri-Lanka,United Ki

SBI (Canada) Ltd.

Toronto, Vancouver, Mississauga

SBI (Japan) Ltd.

Tokyo, Osaka

SBI (California) Ltd.

Los Angeles, Artesia, San Jose (Silicon Valle

SBI Finance Inc.

Delaware, U.S.A.

SBI International (Mauritius)

Mauritius (Off-shore Bank)



SBI (Singapore) Ltd.


Bank of Baroda (Uganda) Ltd.


Bank of Baroda (Kenya) Ltd.


Bank of Baroda (Ghana) Ltd.

Accra, Ghana

Bank of Baroda (U.K.) Nominee Ltd.

London, United Kingdom

Bank of Baroda (Hong Kong) Ltd.

Hong Kong (Converted into Restricted Licensed

Bank of India (Japan) Ltd.

Tokyo, Osaka

Bank of India Finance (Kenya) Ltd.


Canara Bank

Hongkong, United Kingdom

IOB Properties Pte Ltd.


Bank of Baroda (Botswana) Ltd.

Gaborone, Botswana

Bank of Baroda (Guyana) Inc.

Georgetown, Guyana (South America)

ICICI Bank (U.K.) Ltd

London (U.K.)

ICICI Bank (Canada)Ltd

Toronto (Canada)

Bank of Baroda (Tanzania) Ltd.




Bank of Baroda (United Arab Emirate)

Dubai, Abu Dhabi, Ras Al Khaimah, Deira, Dammam, S

Bank of Baroda

Muscat, Oman

Bank of Baroda

Brussels, Belgium

ICICI Bank Eurasia LLC


PT Bank Indomonex


Indian Ocean International Bank Ltd. (IOIB)

Port Louis, Mauritius

Punjab National Bank International Limited (PNBIL)

London, United Kingdom

Bank of Baroda (Trinidad and Tobago) Limited

Trinidad & Tobago

PT Bank Swadesi Tbk


Bank of Baroda (Trinidad and Tobago) Limited

Trinidad & Tobago

Syndicate Bank

United Kingdom

UCO Bank

Hongkong, Singapore

Brief History of Urban Cooperative Banks in India

The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary cooperative banks located in urban and semi-urban areas. These banks, till 1996, were allowed to lend money only for non-agricultural purposes. This distinction does not hold today. These banks were traditionally centred around communities, localities work place groups. They essentially lent to small borrowers and businesses. Today, their scope of operations has widened considerably. The origins of the urban cooperative banking movement in India can be traced to the close of nineteenth century when, inspired by the success of the experiments related to the cooperative movement in Britain and the cooperative credit movement in Germany such societies were set up in India. Cooperative societies are based on the principles of cooperation, - mutual help, democratic decision making and open membership. Cooperatives represented a new and alternative approach to organisaton as against proprietary firms, partnership firms and joint stock companies which represent the dominant form of commercial organisation. The Beginnings The first known mutual aid society in India was probably the Anyonya Sahakari Mandali organised in the erstwhile princely State of Baroda in 1889 under the guidance of Vithal Laxman also known as Bhausaheb Kavthekar. Urban co-operative credit societies, in their formative phase came to be organised on a community basis to meet the consumption oriented credit needs of their members. Salary earners societies inculcating habits of thrift and self help played a significant role in popularising the movement, especially amongst the middle class as well as organized labour. From its origins then to today, the thrust of UCBs, historically, has been to mobilise savings from the middle and low income urban groups and

purvey credit to their members - many of which belonged to weaker sections. The enactment of Cooperative Credit Societies Act, 1904, however, gave the real impetus to the movement. The first urban cooperative credit society was registered in Canjeevaram (Kanjivaram) in the erstwhile Madras province in October, 1904. Amongst the prominent credit societies were the Pioneer Urban in Bombay (November 11, 1905), the No.1 Military Accounts Mutual Help Co-operative Credit Society in Poona (January 9, 1906). Cosmos in Poona (January 18, 1906), Gokak Urban (February 15, 1906) and Belgaum Pioneer (February 23, 1906) in the Belgaum district, the Kanakavli-Math Co-operative Credit Society and the Varavade Weavers Urban Credit Society (March 13, 1906) in the South Ratnagiri (now Sindhudurg) district. The most prominent amongst the early credit societies was the Bombay Urban Co-operative Credit Society, sponsored by Vithaldas Thackersey and Lallubhai Samaldas established on January 23, 1906.. The Cooperative Credit Societies Act, 1904 was amended in 1912, with a view to broad basing it to enable organisation of non-credit societies. The Maclagan Committee of 1915 was appointed to review their performance and suggest measures for strengthening them. The committee observed that such institutions were eminently suited to cater to the needs of the lower and middle income strata of society and would inculcate the principles of banking amongst the middle classes. The committee also felt that the urban cooperative credit movement was more viable than agricultural credit societies. The recommendations of the Committee went a long way in establishing the urban cooperative credit movement in its own right. In the present day context, it is of interest to recall that during the banking crisis of 191314, when no fewer than 57 joint stock banks collapsed, there was a there was a flight of deposits from joint stock banks to cooperative urban banks. Maclagan Committee chronicled this event thus: As a matter of fact, the crisis had a contrary effect, and in most provinces, there was a movement to withdraw deposits from non-cooperatives and place them in cooperative institutions, the distinction between two classes of security being well appreciated and a preference being given to the latter owing partly to the local character and publicity of cooperative institutions but mainly, we think, to the connection of Government with Cooperative movement. Under State Purview The constitutional reforms which led to the passing of the Government of India Act in 1919 transferred the subject of Cooperation from Government of India to the Provincial Governments. The Government of Bombay passed the first State Cooperative Societies Act in 1925 which not only gave the movement its size and shape but was a pace setter of cooperative activities and stressed the basic concept of thrift, self help and mutual aid. Other States followed. This marked the beginning of the second phase in the history of Cooperative Credit Institutions. There was the general realization that urban banks have an important role to play in economic construction. This was asserted by a host of committees. The Indian Central Banking Enquiry Committee (1931) felt that urban banks have a duty to help the small business and middle class people. The Mehta-Bhansali Committee (1939), recommended that those societies which had fulfilled the criteria of banking should be allowed to work as banks and recommended an Association for these banks. The Co-operative Planning Committee (1946) went on record to say that urban banks have been the best agencies for small people in whom Joint stock banks are not generally interested. The Rural Banking Enquiry Committee (1950), impressed by the low cost of establishment and operations recommended the establishment of such banks even in places smaller than taluka towns. The first study of Urban Co-operative Banks was taken up by RBI in the year 1958-59. The Report published in 1961 acknowledged the widespread and financially sound framework of

urban co-operative banks; emphasized the need to establish primary urban cooperative banks in new centers and suggested that State Governments lend active support to their development. In 1963, Varde Committee recommended that such banks should be organised at all Urban Centres with a population of 1 lakh or more and not by any single community or caste. The committee introduced the concept of minimum capital requirement and the criteria of population for defining the urban centre where UCBs were incorporated. Duality of Control However, concerns regarding the professionalism of urban cooperative banks gave rise to the view that they should be better regulated. Large cooperative banks with paid-up share capital and reserves of Rs.1 lakh were brought under the perview of the Banking Regulation Act 1949 with effect from 1st March, 1966 and within the ambit of the Reserve Banks supervision. This marked the beginning of an era of duality of control over these banks. Banking related functions (viz. licensing, area of operations, interest rates etc.) were to be governed by RBI and registration, management, audit and liquidation, etc. governed by State Governments as per the provisions of respective State Acts. In 1968, UCBS were extended the benefits of Deposit Insurance. Towards the late 1960s there was much debate regarding the promotion of the small scale industries. UCBs came to be seen as important players in this context. The Working Group on Industrial Financing through Co-operative Banks, (1968 known as Damry Group) attempted to broaden the scope of activities of urban co-operative banks by recommending that these banks should finance the small and cottage industries. This was reiterated by the Banking Commisssion (1969). The Madhavdas Committee (1979) evaluated the role played by urban co-operative banks in greater details and drew a roadmap for their future role recommending support from RBI and Government in the establishment of such banks in backward areas and prescribing viability standards.