India’s First Bank: When Was It Founded, What Happened to It and Does It Still Exist?

India has a massive banking network today. But do you know which was the very first bank in our country? The British started it years ago. Read on to find out when it opened, who ran it, and if it still functions today.

Image Credit : Gemini AI

First bank in India

We do banking on our smartphones with just one click today. But the banking system actually started way back in 1770. A British trading firm called Alexander and Company opened the 'Bank of Hindustan' in Kolkata. The East India Company used this bank for international trade using European methods. This bank also issued the first paper currency notes in our country. But the Alexander Company faced huge losses in the indigo trade and an economic depression hit Bengal between 1819 and 1832. The company went bankrupt. The country's first bank finally closed down forever on March 31, 1832.

Image Credit : Istock

Before the birth of Reserve Bank of India

The British government introduced the Presidency Banks system after the private banks failed. The government set up the 'Bank of Calcutta' in 1806. This bank became the Bank of Bengal in 1809. The government then started the Bank of Bombay in 1840 and the Bank of Madras in 1843. These three banks worked really well during the colonial rule. The British government later merged these three banks on January 27, 1921. They named the new entity 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.

Image Credit : Pixabay

Ancient bank SBI

The Indian government wanted to expand banking services to rural areas after independence. The central government followed the Gorwala Committee recommendations and nationalized the Imperial Bank on July 1, 1955. The government 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. SBI traces its roots back to the Bank of Calcutta from 1806. Meanwhile, Indians started the Punjab National Bank (PNB) in 1894 with their own money and zero foreign control. PNB created a brand new chapter in our domestic banking history.