International Journal in Management & Social Science
Year : 2014, Volume : 2, Issue : 2
First page : ( 185) Last page : ( 195)
Online ISSN : 2321-1784.

Historical evolution of banking in India

Shabbir Najmi

Lecturer, Shia P.G. College, Lucknow

Online published on 7 June, 2014.

Abstract

This paper mainly analyses the early phase of Banking in India upto 1947. The phase leading up to independence laid the foundation of the Indian banking system. The initial phase (up to 1947) was a difficult period for the banking sector. In Preindependence period most banks were small and had private shareholding, they were largely localised and many of them failed. They came under the purview of the Reserve Bank that was established as a central bank for the country in 1935. In this phase, many banks failed which was marked by the two World Wars and the Great Depression. By the end of this phase, the country's financial requirements were still catered to, in a large measure, by the unorganised sector. The focus of the banking sector was on urban areas and the requirements of agriculture and the rural sector were neglected. Although the co-operative credit movement had a very encouraging beginning, it did not spread as expected despite Government patronage.

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Keywords

Unorganised Sector, World Wars, Government Patronage, Reserve Bank, Great Depression.

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