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HISTORY OF BANKING IN INDIA---------------------------

Without a sound and effective banking system in India it cannot have a healthy Economy.

The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors.

For the past three decades India's banking system has several outstanding achievements to its credit.

The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process.

The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money.

Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dial a pizza.

Money has become the order of the day. The first bank in India, though conservative, was established in 1786.

From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases.

They are as mentioned below:

• Early phase from 1786 to 1969 of Indian Banks
• Nationalization of Indian Banks and up to 1991 prior to Indian banking secto Reforms.

• New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991

To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase III.