Reserve Bank Of India ( RBI) came into existence on April 1, 1935 as a privately –owned bank with only 5 percent shares of the government of India, and a total share capital of Rs. 5 crore. On January 1, 1949, RBI became a state owned bank on account of private share holdings by the government.
Functions of RBI
- RBI regulates issue of bank notes above one rupee denomination
- Undertakes distribution of all currency notes and coins on behalf of the government
- Acts as the banker to the Government of India and the state governments, commercial and cooperative banks
- Formulates and administers the monetary policy
- Represents India at theInternational Monetary Fund (IMF)
Note: No personal accounts are maintained in RBI.
State Bank of India is the largest public sector bank of India, and was created after nationalization of Imperial Bank of India in 1955. In terms of branches (10, 836 –
-branches), it is the largest in the world.
Nationalisation of Banks
The Government of India nationalized 14 banks on July 19, 1969 and six more on April 15, 1980. First 14 nationalised banks:
- Bank of India 8. Central Bank of India
- Union Bank of India 9. Canara Bank
- Bank of Baroda 10. Syndicate Bank
- Bank of Maharashtra 11. United Commercial Bank
- Punjab National Bank 12. Allahabad Bank
- Indian Bank 13. United Bank of India
- Indian Overseas Bank 14.Dena Bank
Second Phase of Nationalisation
1. Andhra Bank 4.Oriented Bank of Commerce
2. Corporation Bank 5. Punjab and Sindh Bank
3. New Bank of India 6.Vijay Bank
The New Bank of India is merged with the Punjab National Bank, leaving only 19 nationalised banks now.