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First Bank Of India: The banking sector plays a vital role in shaping the economy of any nation. It supports trade and commerce, offers loans to individuals and businesses, and helps people safely save money. British rule marked the beginning of India's lengthy and fascinating banking history. The British East India Company, traders, and merchants needed a secure location to handle transactions and deposit funds because trade was expanding quickly at the time.

This gave rise to the idea of creating financial institutions that could manage deposits from the general public and offer easy access to funds when needed. With thousands of branches, digital services and financial products at present days, that affect every citizen's life, the Indian banking industry has expanded over the years to become one of the biggest in the world. However, the first bank ever founded in India laid the groundwork for this extensive network, which served as a precursor to contemporary Indian banking.

In this article, we have explained in details about first and oldest banks in India. Which was the first bank and how the indian bank industry rised during british rule.

Which Was the First Bank in India?

The first and oldest bank in India was Madras Bank, founded in 168,3, followed by Bank of Bombay, founded in 1720 and then Bank of Hindustan, founded in 1770 in Calcutta (now Kolkata). Today, all three banks are defunct as a result of merging with other banks.

Madras Bank, which was founded on 21 June 1683 under the Madras presidency, eventually merged with the same name Bank of Madras in 1843. However, the Bank of Madras also merged with two other banks Bank of Bengal and the Bank of Bombay, in 1921 to form the Imperial Bank of India, currently known as the State Bank of India.

 

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Bank of Hindustan, which was founded in 1770 in Calcutta, was closed in 1832 due to a financial crisis. It was set up during the British East India Company rule to meet the growing need for financial services. The bank functioned primarily to facilitate trade and commerce for Europeans in India.

How Did It Shape Indian Banking?

* Introduced the concept of organised banking in India.

* Encouraged people to keep money safe in banks instead of in their homes.

* Inspired the creation of other banks such as the Bank of Bombay, Bank of Hindustan, General Bank of India (1786) and the Bank of Bengal (1806).

* Laid the foundation for today’s Reserve Bank of India and nationalised banks.

 

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Legacy and Impact

Though these banks no longer exist, their establishment marked the beginning of modern banking in India. It introduced Indians to savings, deposits and loans in a formal system. This development paved the way for financial growth, economic stability, and modern-day banking facilities like ATMs, online banking, and UPI transactions.