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History and type of banking system in India (Banking system type and history in India)

Bank is an important part of our life today. It has become so important that without them we cannot even imagine our financial management. The history of the banks of our country bringing modern and new technology every day is no less interesting. If seen from the general definition of banks, since the Rig Vedic period, there has been the existence of money saving agencies and the institutions that pay interest on them. The origins of banking in India can also be traced back to the ancient Mahajan tradition, which used to lend money to people at the time of need and used to transfer people's money to them through hawala while going abroad and coming and some money in return. Used to charge. Similar entities are also mentioned during business dealings with Egypt and other such ancient civilizations, but there is not much research and reference material available on them. The modern banking that we are using today,

History-Of-Banking-In-India

 History of banking in India

Banking System history in India in hindi

Banking system in ancient India  and history of banking (Banking system in ancient India or History )

In ancient India, when civilization was at its peak, it was dominated by opulence and money. In such a situation, an organization like bank was needed to manage the money.

In the Vedas, there is mention of a post named Kusidin, which used to manage money in those times. It is also mentioned in the sources and the natives.

It makes sense that this manager of wealth remained a major source of transactions between people from 2000 BCE to 400 BCE for about 1600 years.

Meanwhile, references to the expiry or evils of this institution were also found in these sources, which shows that over time their credibility was affected and in time they were finished.

There is also mention of lending on interest among the natives, the agreement for lending is mentioned here like a loan letter or a loan page.

Kautilya also mentions these loan letters in his book Arthashastra, he addresses it as a loan article.

The Mauryan period comes as the state government starts doing banking work, the evidence comes out. It is mentioned that through the order letter, the state used to give the promise letter to the traders to repay the money.

Later this practice was adopted by the traders as well and by 185 BCE such claims came into common practice.

Banking system in medieval India during medieval India

The letters of credit which came into vogue in the Mauryan period remained in circulation in the medieval period, especially till the Mughal period, and were used a lot.

There are two types of debentures mentioned in Mughal documents, the document A Indutlab was issued on demand whereas the document A term could be cashed only after a certain time, it was like a fixed deposit of that period.

These documents were issued from the royal treasury but parallel to this, another system was born which was also called Mahajani.

In this, a person used to lend arbitrary interest by lending money. It was during this period that merchants started using the bill for the first time for foreign trade, which can be called an ancient form of credit card.

Introduction of modern banking in India (Modern banking system in India)

The beginnings of modern banking in India can be traced back to the beginning of the colonial period in this country, when the Dutch, British and French came to India for the purpose of trading about 200 years ago.

Out of these, only the British got an opportunity to set foot here. With business, he needed a bank to manage his income and currency and the British East India Company first laid the foundation of 3 banks in India.

Since the influence of the British first increased in Bengal, so the first bank opened in Bengal in the name of 1809 Bank of Bengal.

He then started the Bank of Bombay in 1840 and the Bank of Madras in 1843 in his other areas of influence, Bombay and Madras Presidency. After the revolution of 1857, when the East India Company was abolished in India and the rule came directly under the Queen of Britain, these three banks were merged together and renamed Imperial Bank.

This Imperial Bank became the main bank of India after independence, which was renamed in 1955 to State Bank of India. It was a public sector bank in India.

After independence, banking in India (Banking in India after independence)

The Government of India felt the need of an institution to regulate banking institutions as a country and also to manage government currency, the Reserve Bank of India was nationalized in 1949 and its role as a central bank even after independence. Kept the same

The Reserve Bank was also given all the rights to regulate banking in India. After this, there was a big change in the banking sector of India when the Government of India nationalized eight regional banks in the country through the State Bank of India Act in 1959 and made them a subsidiary of State Bank of India.

State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Hyderabad, State Bank of Indore, State Bank of Mysore, State Bank of Indore and State Bank of Patiala are the main ones.

Inspired by this successful nationalization, the Government of India took a similar step on 19 July 1969 and nationalized the major fourteen banks of the country.

This was a bigger step than before, it increased the credibility of Indian banks and strengthened the Indian banking system.

After this, after a long time, on 15 April 1980, six private banks were nationalized.

The Indian banking sector made a big leap in 1993 when the Reserve Bank of India allowed domestic banks to carry out banking activities and private sector banks now started serving the Indian public like public banks.

How much banking does the world's economy run ?

If you are asked to tell about a bank, then it will be your opinion, a place where you keep your money safe and do financial transactions. But here you are right but very limited. Yes, sir, apart from this common transaction, there is much more in the form of banking in the whole world. Banking functions are also different and the medium of service they provide is also very different. You may not have even heard the name of some of these banks. Here some of them are being told, so that you know how important role our banks play in the world economy.

Types of banking in India (T ypes of B anking System in I ndia ) 

By the way, one thing should be made clear while talking about the varieties of banking, that there is not much difference in their work so that you can draw a thick line of difference between them. Rather, due to the very thin difference, their way of working changes and they provide their services to different types of clients.

Retail Bank (R etail Banking )

These are the banks about which we all know and they serve the largest part of the world's population.

These banks work for the common man and manage their money.

Any person can open their savings or current account here after some paperwork.

This bank pays interest on savings to its customer and levies interest on the loan given when needed.

This bank provides facilities like debit cards, credit cards and checks to its customers in the name of convenience.

The business structure of such a bank basically works on the business model of providing money at low interest and providing high interest.

Commercial Bank (C ommercial Banking )

As the name itself suggests, this bank basically works for providing commercial services.

Its customers are only traders or businessmen who open an account here.

Such customers need different types of services and bank guarantees for transactions tailored to their business, which such banks provide.

Such banks manage transactions of large amounts and also manage them.

Investment bank (I Nvestment Banking )

Investment banks are known for their financial expertise and this is why businessmen use their services.

If a business man wants to get his company listed in the stock market or wants to find an investor for his company, then such banks help him.

These banks provide investment to their customers and many times they also get the investment guarantee given to them.

Such banks give ratings to their customer's business as well as suggestions to improve it further.

Central Banks (C Entral Banking )

Central banks are the main body handling the world's currency system.

Every country in the real world creates such an institution to handle its currency, which should monitor its currency and work to make it valuable.

The Reserve Bank of India performs the role of Central Bank in India.

Much of the strength and weakness of the economy of any country works on the policies made by these central banks.

The central bank manages the currency and monitors its illegal use and devaluation.

The Central Bank also licenses the functioning of all banks in its country, and also creates ideal guidelines to work for them.

Credit Unions or small loan company (C redit U nion banking )

Credit unions or small loan organizations are basically a self-help group that works just like a bank.

It can only serve its members instead of the general consumer.

Such organizations lend money to their members on the basis of neither profit nor loss and take payment from them in easy installments.

The money lent by these organizations is also collected only with the cooperation of the members, on which no interest is charged or very little interest is paid.

Online Bank (O nline Banking )

Such banks have become popular after the introduction of Internet, and they provide all their services through the web.

Here also the customer opens the account and carries out his financial transactions through his online account.

It has just started in India, online wallets and mobile wallets in our country can be considered in the initial stage of online banking.

These banks are growing rapidly around the world and it is expected that in the coming ten years half of the world's population will join such a bank.

Mutual Banking (M Utual Banking )

Mutual banking is very similar to credit union banking, but where credit unions lend only for doing business, mutual banking gives loans to its members keeping in mind the personal needs.

In this banking also, the work of borrowing and lending is done only among the members, and it also works on the principle of neither profit nor loss.

In this type of banking, money is provided from one member to another and the same process is repeated again and again.

This type of banking is more prevalent in developing and backward countries because the licensing process for this is very easy or not.