Banks play an important role in structuring and maintaining the economic development of any country. They provide economic strength to the government which helps the government to accomplish each goal of the planned economic development.
Have you ever wondered when did the first bank in India was established? The first bank was established in India in 1683. Banks in India were established by the British Government to carry out the import and export business efficiently.
Many banks during the 17th and 18th centuries were closed or merged to survive.
Presently, there are 12 Public Sector Banks, 22 Private Banks, 43 Rural banks, 12 Small Finance Banks, and 6 Online Payments Banks in India.
If you are wondering about the oldest banks in India, here is detailed information on the history of banking in India.
List of Oldest Banks in India:
1. The Madras Bank (1683):
The Madras Bank was the first bank in India which was founded on 21 June 1683. This bank was established and operated by Governor William Gyfford and his council. The headquarter of this bank was in Chennai formerly known as Madras.
Most of the bank staff were British nationals. And the main clients were the European traders.
Later in 1806, the bank was closed and restarted as Madras Bank.
Eventually, in 1843, this bank was one of the four banks merged with the Bank of Madras which later was merged with The Imperial Bank of India.
The Imperial Bank of India was transformed into The State bank of India.
2. Bank of Bombay (1720):
The second oldest bank in India was the Bank of Bombay which was founded by East India Company with an initial investment of Rupees 100,000.
This public sector bank was headquartered in Bombay castle and was staffed and managed by members of East India Company.
In 1760 this bank was circled in financial circumstances and owed its creditors Rupees 28,000. Later in 1770, the management decided to clear the dues and close the bank.
3. Bank of Hindostan (1770)
Bank of Hindostan was a public sector bank founded in 1770 and it was one of the first modern banks in colonial India.
This bank was founded by Alexander and Company. It was the first bank that issued paper notes under the Paper Currency Act of 1861.
This bank survived for 62 years.
The Bank of Hindostan prevailed through 3 economic crises of the 18th century.
- The recession of 1819
- The failure of Palmer and Co., a British agency house
- The Banking Crisis of 1832
4. General Bank of Bengal and Bihar (1773)
The fourth oldest bank in India was the General Bank of Bengal and Bihar. This bank was founded on 1st April 1773 by the first Viceroy of India named Warren Hastings.
This private sector bank of that time was managed and staffed by the selected members of East India Company.
The motive behind this bank was to run the business of East India Company smoothly.
The bank was in the business for only two years, it was defunct in 1775. But during its service, it was one of the first banks to issue its own paper currency.
5. Bengal Bank (1784)
Bengal Bank was founded in 1784 by private entrepreneurs and was is in the service for about seven years.
This private sector bank played a vital role in the economic development of East Bengal and Bangladesh.
It also issued its own paper banknotes or paper currency. It was also the first bank to introduce a cheque and checkbook system to its customer.
Later on, this system was adopted by other banks.
6. General Bank of India (1786)
The sixth oldest bank in India was the General Bank of India started in 1786 and was perished in 1791.
This public sector bank was headquartered in Calcutta (Kolkata). Calcutta was the main active trading center for the East India Company.
This bank was staffed and managed by members of the East India Company.
The General Bank of India provided services like insurance, deposits, various schemes for agriculture and business, etc.
7. Carnatic Bank (1788)
Carnatic Bank was one of the most highlighted banks in India’s history. It was the first formal bank of India.
Carnatic Bank was a private sector bank founded by Josias Du Pré Porcher an English Politician on 1 April 1788.
The East India members were operating the bank. It offered services like insurance, schemes, and trade finance.
The Carnatic Bank was merged with the other 3 banks to form the Bank of Madras.
The Bank of Madras was then converted into the Imperial Bank of India and the Imperial Bank today is known as the State Bank of India.
8. The British Bank of Madras (1795)
The British Bank of Madras is the 8th oldest bank in India. It was founded on 1st April 1795 as a private sector bank.
It was founded by European Traders and managed by the members of the East India Company. It was headquartered in George Town, Chennai.
The bank offered services like loan schemes, deposits, insurance, etc.
This bank was defunct in 1843.
It was one of the four banks that merged to form Imperial Bank which is now known as State Bank of India.
9. Bank of Calcutta (1806)
Bank of Calcutta was founded on 2 June 1806 to finance General Wellesley’s wars against Tipu Sultan and the Marathas.
It had branches in four different cities namely Patna, Banaras, Mirzapur, and Rangoon.
Many renowned personalities of India were the customers of this bank including the first Prime Minister of India Rajendra Prasad, Rabindranath Tagore, etc.
The bank served for 101 years before it was defunct in 1921 to survive.
The bank merged with Bank of Bombay and Bank of Madras to form Imperial Bank.
And the Imperial Bank now is known as the State Bank of India.
10. The Commercial Bank (1819)
The last bank on our list is the Commercial Bank which was founded by the agency house of Mackintosh & Co. on 1 April 1819.
This one of the oldest banks in India was managed and staffed by the members of the East India Company.
It offered services like deposits, loan schemes, financing, etc.
During its nine-year service, the bank issued its own paper currency.
During the economic crisis of 1828, the Commercial Bank merged with the Calcutta Bank to form the Union Bank (1828).
Eventually, the Union Bank was also defunct in 1842.
FAQ’s
1. Which is the oldest surviving bank in India?
Ans: SBI is the oldest running bank founded in 1806 as the Calcutta Bank. It is formed by merging 9 banks. Previously SBI was known as the Imperial Bank of India.
2. Which is the first modern bank in India?
Ans: Bank of Hindostan founded in 1770 was the first modern-era bank in India.
3. Which bank introduced ATM in India?
Ans: ATM was introduced by HSBC (Hongkong and Shanghai Banking Corporation) bank in 1987.
4. Which bank introduced the first credit card in India?
Ans: Andhra Bank introduced credit card to its customer in the year 1981.