Evolution & Growth of Banking System in India

By Rita prusty

1. Evolution Phase (prior to 1950)‡ ‡ ‡ ‡ ‡ General bank of India 1786(first bank) Reserve bank of India 1935 Slow growth and periodic failure People mostly save in postal deposits Role of commercial banks were confined to Communities' savings & Providing credit to selected & limited segments of the economy .

Foundation Phase(1950 .566 banks ‡ December 1968.2.281 banks .1968)‡ Strongly focused on security ‡ Banking Regulation Act was passed in 1949 to conduct & control operations of the commercial banks in India ‡ Transformation of Imperial Bank of India into SBI in 1956 ‡ Strengthening of the co-operative credit structure ‡ Provision of long term finance to agriculture & Industry ‡ December 1951.

Expansion Phase(1968-1984)‡ Direct Lending by banks ‡ Poverty alleviation & employment generation schemes ‡ RRBs in 1975.3. NABARD in 1982 ‡ 1982.268 banks .

Consolidation phase(1985-1990)‡ Consolidating the gains of branch expansion undertaken by banks ‡ Prices of assets & liabilities were fixed by RBI .4.

Reformatory Phase(1991 onwards)‡ ‡ ‡ ‡ Entry of Foreign Banks Phone Banking and Net-Banking Shelter from external macroeconomic shock System became more convenient and swift .5.

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