India’s First Bank: Who Started It, When Did It Begin And Does It Still Exist Today? READ ON

India has a long banking history that began centuries ago. But which was the country’s first bank, who established it, and does it still operate today? Here’s everything you need to know.

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Banking is super easy today with smartphone apps. But the Bank of Hindustan laid the foundation for this system back in 1770. Alexander and Company, a British trading firm, started this first bank in Kolkata. The East India Company ran it using European methods for their international trade. This bank actually issued the first paper currency notes in our country. Sadly, Alexander and Company went bankrupt due to heavy losses in the indigo business and the Bengal economic depression between 1819 and 1832. The bank finally closed down on March 31, 1832.

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The British government introduced the Presidency Banks system after private banks failed. They set up the Bank of Calcutta in 1806. This became the Bank of Bengal in 1809. Later, they started the Bank of Bombay in 1840 and the Bank of Madras in 1843. These three main banks ran very well during the colonial rule. The British government then merged these three banks on January 27, 1921, to create the Imperial Bank of India. This Imperial Bank handled all central bank duties in our country until the Reserve Bank of India (RBI) started in 1935.

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The government started expanding banking services to rural areas after independence. The central government nationalized the Imperial Bank on July 1, 1955, based on the Gorwala Committee recommendations. They renamed it as the State Bank of India (SBI). The Bank of Hindustan was the first bank, but SBI holds the record as the oldest continuously running bank. Its roots go all the way back to the Bank of Calcutta in 1806. On the other hand, Punjab National Bank (PNB) created history in 1894. Indians started PNB completely with their own capital and ownership, without any foreign involvement.