Commercial Banking In India


Bank is an institution that accepts deposits frm the public,mobilizes their savings and keeps the same under its custody, these deposits can be withdrawn by Cheques or ATMs or any other available methods. Banks lends money to those who need it and also performs diverse agency functions and also create credit.

Commercial banks are the  institutions that accept deposits from the people and advances loans. Commercial Banks a;sp create credit. In India, such banks alone called commercial banks which are established in accordance with the provision of the Banking Regulation Act, 1949.

Commercial banks may be a Scheduled banks or Non-Scheduled banks. Scheduled banks is classified into two big category based on the ownership of the bank.

  • I) Public Sector Banks

  • II) Private Sector banks

Public Sector Banks is again divided into three category and they are i) Nationalized Banks,  ii) State Bank of India and It’s Associate Group and iii) Regional Rural Banks.

1) State Bank Group -This group consist of State Bank of India and Five Sate Bank of India Associate banks. The RBI owns the majority of the shares of the SBI and some of it’s associates. State Bank of India is the first public sector bank in india. Imperial bank of india acquired by the government to form the State Bank of India in 1955.  In 1959 the State Bank of India Subsidiary act was passed and by the virtue of this act seven princly states bank were made the subsidiary of State Bank of India. Now State Bank of India has only five subsidiary as two of it subsidiary bank merged with the parent concern.

2) Nationalised Bank In 1969 the government of India effected the nationalization of of 14 scheduled commercial banks in order to expand the branch network followed by six more bank in 1980. Total 20 commercial banks were nationalized in two bank nationalization process but  in 1993 New Bank of India was merged with Punjab National Bank.

Regional Rural Banks – In 1975, the state bank group and nationalized banks were required to sponsor and set up Regional Rural Banks in partnership with individual states to provide low cost financing and credit facilities to the rural masses. On the recommendation of the Banking Commission (1972), on October 2 1975 five Regional Rural Bank were established. Their main function is to provide financial help to small and marginal farmers and rural workers to help the rural economy to grow.

Private Sector Banks is also classified into three category

  1. Old Private Banks

  2. ii) New Private Banks

  3. iii) Foreign Banks

The “private-sector banks” are banks where greater parts of stake or equity are held by the private shareholders and not by government. The old private sector banks existed prior to the nationalisation in 1969 and kept their independence because they were either too small or specialist to be included in nationalisation. The new private sector banks are those that have gained their banking license since the liberalisation in the 1990s.

Old private-sector banks in India:

1. Bank of punjab merged with Centurion Bank to form Centurion Bank of Punjab in June

2. City Union Bank

3. Dhanlaxmi Bank

4. Federal Bank

5. ING Vysya Bank

6. Jammu and Kashmir Bank

7. Karnataka Bank

8. Karur Vysya Bank

9. Lakshmi Vilas Bank

10. Nainital Bank

11. RBL Bank

12. SBI Commercial and international Bank

13. South Indian Bank

14. Tamilnad Mercantile Bank Limited

15. United Western Bank

16. IDBI Bank Ltd (reverse merged with parent IDBI in 2004 to become IDBI Bank.
Making this public sector bank private)


New private-sector banks in India:

1. Axis Bank (earlier UTI Bnk)

2. Bank of Punjab (actually an old generation private bank since it was not founded under post-1993 new bank licensing regime)

3. Centurion Bank Ltd. (Merged Bank of Punjab in late 2005 to become Centurion Bank of Punjab, acquired by HDFC Bank Ltd. in 2008)

4. Development Credit Bank (Converted from Co-operative Bank, now DCB Bank Ltd.)

5. HDFC Bank

6. ICICI Bank

7. IndusInd Bank

8. Kotak Mahindra Bank

9. Yes Bank

10. Times Bank (Merged with HDFC Bank Ltd.)

11. Global Trust Bank (India) (Merged with Oriental Bank of Commerce)

12. Balaji Corporation Bank Limited

Foreign Private Banks in India

  • Abu Dhabi Commercial Bank

  • American Express Bank Ltd.

  • Bank of America, NA

  • Bank of Bahrain & Kuwait BSC

  • Mashreq Bank PSC

  • Bank of Nova Scotia

  • Bank of Tokyo Mitsubishi UFJ Ltd.

  • Citi Bank N.A.

  • Deutsche Bank

  • HSBC Ltd.

  • Societe Generale

  • Sonali Bank

  • BNP Paribas Bank

  • Barclays Bank p.l.c.

  • DBS Bank Ltd.

  • Bank International Indonesia

  • Arab Bangladesh Bank Ltd.

  • Standard Chartered Bank

  • State Bank of Mauritius Ltd.

  • Bank of Ceylon

  • Cho Hung Bank

  • China Trust Commercial Bank

  • Krung Thai Bank plc.

  • Antwerp Diamond Bank N.V.

  • J P Morgan Chase Bank

  • Mizuho Corporate Bank Ltd.

  • Oman International Bank SAOG

  • Credit Agricole Corporate and Investment Bank

  • The Royal Bank of Scotland


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