Banks are the important segment in Indian Financial System. An efficient banking system helps the nation’s economic development. Various categories of stakeholders of the Society use the banks for their different requirements. Banks are financial intermediaries between the depositors and the borrowers. Apart from accepting deposits and lending money, banks in today’s changed global business environment offer many more value added services to their clients. The Reserve Bank of India as the Central Bank of the country plays different roles like the regulator, supervisor and facilitator of the Indian Banking System.
Modern banking in India originated in the last decades of the 18th century. The first banks were Bank of Hindustan (1770-1829) and The General Bank of India, 1786 and since defunct. Thereafter, three presidency banks namely the Bank of Bengal, the Bank of Bombay and the Bank of Madras, were set up. The largest bank, and the oldest still in existence, is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal.
The three banks merged in 1921 to form the Imperial Bank of India, which upon India's Independence, became the State Bank of India in 1955. For many years the presidency banks acted as quasi-central banks, as did their successors, until the Reserve Bank of India was established in 1935.