Banking in India

[11][12] The majority of research studies state that Indians have historically preferred bank deposits over other investing options because of safety and security.

[13][14][15] Over 95% of Indian consumers prefer to keep their money in bank accounts, while less than 10% choose to invest in equities or mutual funds, according to a SEBI survey.

[20][17][18] The Vedas, ancient Indian texts, mention the concept of usury, with the word kusidin translated as "usurer".

[24] The Jatakas, Dharmashastras and Kautilya also mention the existence of loan deeds, called rnapatra, rnapanna, or rnalekhaya.

[25][26] Later during the Mauryan period (321–185 BCE), an instrument called adesha was in use, which was an order on a banker directing him to pay the sum on the note to a third person, which corresponds to the definition of a modern bill of exchange.

[26] During the period of British rule merchants established the Union Bank of Calcutta in 1829,[27] first as a private joint stock association, then partnership.

Union Bank was incorporated in 1845 but failed in 1848, having been insolvent for some time and having used new money from depositors to pay its dividends.

The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community.

[citation needed] The inaugural officeholder was the Britisher Sir Osborne Smith(1 April 1935), while C. D. Deshmukh(11 August 1943) was the first Indian governor.

On 12 December 2018, Shaktikanta Das, who was the finance secretary with the Government of India, begins his journey as the new RBI Governor, taking charge from Urjit R Patel.

The years of the First World War were turbulent, and it took its toll with banks simply collapsing despite the Indian economy gaining indirect boost due to war-related economic activities.

Nevertheless, the partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralysing banking activities for months.

[33] Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill,[35] and it received presidential approval on 9 August 1969.

Until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

[citation needed] In the early 1990s, the then government embarked on a policy of liberalisation,[37] licensing a small number of private banks.

The next stage for the Indian banking has been set up, with proposed relaxation of norms for foreign direct investment.

[47] An analyst foresaw an initial negative impact as a result of different pension liability provisions and accounting policies for bad loans.

[53][54] MD and CEO of UBI, Ashok Kumar Pradhan, stated that the merged entity would begin functioning from 1 April 2020.

The proposal would create the fourth largest PSB trailing SBI, PNB, BoB with assets of ₹15.20 lakh crore (US$180 billion) and 10,324 branches.

The proposal would make Union Bank of India the fifth largest PSB with assets of ₹14.59 lakh crore (US$170 billion) and 9,609 branches.

In a first of a kind move, Tier- II bond holders have been asked by RBI to write off their holdings in LVB.

Unity SFB then was being created by Centrum Finance and payment provider BharatPe to absorb the liabilities of the scam hit bank.

This led to a lot of probable capital holding violations for which the combined entity was given a year to bring under statutory limits.

Before the merger, HDFC swapped its group company Gruh Finance to Bandhan bank for a 15% stake in its combined capital.

There are press reports that the banks' loan recovery efforts have driven defaulting borrowers to suicide.

[68] Pradhan Mantri Jan Dhan Yojana (Hindi: प्रधानमंत्री जन धन योजना, English: Prime Minister's People Money Scheme) is a scheme for comprehensive financial inclusion launched by the Prime Minister of India, Narendra Modi, in 2014.

[72] Run by Department of Financial Services, Ministry of Finance, on the inauguration day, 1.5 Crore (15 million) bank accounts were opened under this scheme.

The draft guidelines for licensing of payments banks in the private sector were formulated and released for public comments on 17 July 2014.

[77] To further the objective of financial inclusion, the RBI granted approval in 2016 to ten entities to set up small finance banks.

A huge data breach on debit cards issued by various Indian banks was reported in October 2016.