Everest Bank Ltd.
DNB Bank ASA
Caixa Geral de Depositos
(Bank for Foreign Economic Affairs)
Korea Exchange Bank
Industrial Bank of Korea
Banco de Sabadell SA
Banco Bilbao Vizcaya Argentaria
Hatton National Bank
Skandinaviska Enskilda Banken AB
Mega International commercial Bank
Asya Katilim Bankasi AS
Emirates Bank International
First Gulf Bank
Duncan Lawrie Ltd
The Bank of New York Mellon
Wells Fargo Bank N.A.
(Sub-office at Chennai & New Delhi)
India’s Banking history:
When in 1947, India got independence from East India company rule, at that time India had main five banks namely: Central Bank of India, Punjab National Bank, United Commercial Bank, Bank of Baroda, and Bank of India. This year and the preceding year were vicious for Indian Economy as the following year in 1948, India and Pakistan got separated into two different countries and it lead to division of the bigger banks.
India’s very first bank was called, the General Bank of India it was established in the year 1786. The East India company had setup The Bank of Bengal/Calcutta in the year 1809, Bank of Bombay in 1840 and Bank of Madras in 1843. The nxt bank which came into existence was the Bank of Hindustan which put up in the year 1870. Above mentioned three units (bank of Calcutta, bank of Bombay and Bank of Madras) were collectively called as presidency banks. Allahabad bank who was setup in 1865, was the 1st bank in the history to be run by only Indians. Punjab national Bank was established in 1984 with head offices at Lahore. In 1906-1913, Bank Of India Central Bank of India, Bank of Baroda, Canara bank, Indian bank and bank of Mysore were established in 1921, all the presidency banks were merged to form the Imperial Bank of India which was then run by European Shareholders. Thereafter the reserve Bank of India was established in April 1935.
At the time of first phase the growth of banking sector was very slow. Between 1913 and
1948 there were approximately 1100 small banks in India. To streamline the functioning
and activities of commercial banks, the Government of India came up with the Banking
Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per
amending Act of 1965 (Act No.23 of 1965). Reserve Bank of India was vested with
extensive powers for the supervision of banking in India as a Central Banking Authority.
After independence, Government has taken most important steps in regard of Indian
Banking Sector reforms. In 1955, the Imperial Bank of India was nationalized and was
given the name "State Bank of India", to act as the principal agent of RBI and to handle
banking transactions all over the country. It was established under State Bank of India
Act, 1955. Seven banks forming subsidiary of State Bank of India was nationalized in
1960. On 19th July, 1969, major process of nationalization was carried out. At the same
time 14 major Indian commercial banks of the country were nationalized. In 1980,
another six banks were nationalized, and thus raising the number of nationalized banks to
20. Seven more banks were nationalized with deposits over 200 Crores. Till the year
1980 approximately 80% of the banking segment in India was under government’s
ownership. On the suggestions of Narsimhan Committee, the Banking Regulation Act
was amended in 1993 and thus the gates for the new private sector banks were opened.
The following are the major steps taken by the Government of India to Regulate Banking1
Government policy on banking industry (Source:-The federal Reserve Act 1913 and
The Banking Act 1933)
Banks operating in most of the countries must contend with heavy regulations, rules
enforced by Federal and State agencies to govern their operations, service offerings, and
the manner in which they grow and expand their facilities to better serve the public. A
banker works within the financial system to provide loans, accept deposits, and provide
other services to their customers. They must do so within a climate of extensive
regulation, designed primarily to protect the public interests.
The main reasons why the banks are heavily regulated are as follows:
• To protect the safety of the public’s savings.
• To control the supply of money and credit in order to achieve a nation’s broad
• To ensure equal opportunity and fairness in the public’s access to credit and other
vital financial services.
• To promote public confidence in the financial system, so that savings are made
speedily and efficiently.
• To avoid concentrations of financial power in the hands of a few individuals and
• Provide the Government with credit, tax revenues and other services.
• To help sectors of the economy that they have special credit needs for eg.
Housing, small business and agricultural loans etc.
Liberalisation was introduced in Indian economy 18 years ago. Indian banking system is an animated cluster of competence enhanced Public Sector units and progress thirsty private sector banks. The services, money instruments, efficiency, IT facilities and management would have been a far off our vision 10 years ago. The amount of conveniences banks are providing to their corporate clients and retail customers has been improving and it was something no one ever imagined or even in their thoughts. Indian banking industry has witnessed exponential escalation the CNB Bank Index has shown a growth of 1100% in absolute terms, a compounded rate annual growth rate of 25% in the time period of 2000-2010. And if we look at the sensex, it grew at an compounded annual growth rate of 14%. The year 2010 was a good year for the Indian banking sector as it contributed to the GDP by 16.35%.
. All this led to the retail boom in India. People not just demanded more
from their banks but also received more. Currently (2007), banking in India is 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 as compared 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 time-especially in its
services sector-the demand for banking services, especially retail banking, mortgages and
investment services are expected to be strong.
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
voted 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 25
personal loans. There are press reports that the banks' loan recovery efforts have driven
defaulting borrowers to suicide.