India has a well developed banking system.

Most of the banks in India were founded by Indian entrepreneurs and

visionaries in the pre-independence era to provide financial assistance to traders, agriculturists and budding Indian
industrialists. The origin of banking in India can be traced back to the last decades of the 18th century. The General
Bank of India and the Bank of Hindustan, which started in 1786 were the first banks in India. Both the banks are now
defunct. The oldest bank in existence in India at the moment is the State Bank of India. The State Bank of India came
into existence in 1806. At that time it was known as the Bank of Calcutta. SBI is presently the largest commercial
bank in the country.

The role of central banking in India is looked by the Reserve Bank of India, which in 1935 formally took over these
responsibilities from the then Imperial Bank of India. Reserve Bank was nationalized in 1947 and was given broader
powers. In 1969, 14 largest commercial banks were nationalized followed by six next largest in 1980. But with
adoption of economic liberalization in 1991, private banking was again allowed.

The commercial banking structure in India consists of: Scheduled Commercial Banks and Unscheduled Banks.
Scheduled commercial Banks constitute those banks, which have been included in the Second Schedule of Reserve
Bank of India (RBI) Act, 1934. RBI includes only those banks in this schedule, which satisfy the criteria laid down vide
section 42 (6) (a) of the Act.

Indian banks can be broadly classified into public sector banks (those banks in which the Government of India holds
a stake), private banks (government doe not have a stake in these banks; they may be publicly listed and traded on
stock exchanges) and foreign banks.

Bank Fixed Deposits

Bank Fixed Deposits are also known as Term Deposits. In a Fixed Deposit Account, a certain sum of money is
deposited in the bank for a specified time period with a fixed rate of interest. The rate of interest for Bank Fixed
Deposits depends on the maturity period. It is higher in case of longer maturity period. There is great flexibility in
maturity period and it ranges from 15days to 5 years.

Current Account
Current Account is primarily meant for businessmen, firms, companies, public enterprises etc. that have numerous
daily banking transactions. Current Accounts are cheque operated accounts meant neither for the purpose of earning
interest nor for the purpose of savings but only for convenience of business hence they are non-interest bearing
accounts

Demat Account
Demat refers to a dematerialised account. Demat account is just like a bank account where actual money is replaced
by shares. Just as a bank account is required if we want to save money or make cheque payments, we need to open
a demat account in order to buy or sell shares.

Recurring Bank Deposits

Under a Recurring Deposit account (RD account), a specific amount is invested in bank on monthly basis for a fixed
rate of return. The deposit has a fixed tenure, at the end of which the principal sum as well as the interest earned
during that period is returned to the investor.

Reserve Bank of India

The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of
India Act, 1934. Though initially RBI was privately owned, it was nationalized in 1949. Its central office is in Mumbai
where the Governor of RBI sits.

Savings Bank Account

Savings Bank Accounts are meant to promote the habit of saving among the citizens while allowing them to use their
funds when required. The main advantage of Savings Bank Account is its high liquidity and safety.

Senior Citizen Saving Scheme 2004

The Senior Citizen Saving Scheme 2004 had been introduced by the Government of India for the benefit of senior
citizens who have crossed the age of 60 years. However, under some circumstances the people above 55 years of
age are also eligible to enjoy the benefits of this scheme.

Foreign Banks in India

Foreign banks have brought latest technology and latest banking practices in India. They have helped made Indian
Banking system more competitive and efficient. Government has come up with a road map for expansion of foreign
banks in India.

Nationalised Banks
Nationalised banks dominate the banking system in India. The history of nationalised banks in India dates back to
mid-20th century, when Imperial Bank of India was nationalised (under the SBI Act of 1955) and re-christened as
State Bank of India (SBI) in July 1955.

Private Banks in India

Initially all the banks in India were private banks, which were founded in the pre-independence era to cater to the
banking needs of the people. In 1921, three major banks i.e. Banks of Bengal, Bank of Bombay, and Bank of Madras,
merged to form Imperial Bank of India.