Initially, as per its royal charter, it acted as the central bank for India prior to the formation of the Reserve Bank of India (RBI) in 1935.

The Imperial Bank of India is started through the Kayasth Trading and Banking Corporation which worked to the monthly payment paid of teacher's of colleges and school and came into existence on 27 January 1921 through the reorganisation and amalgamation of the three Presidency Banks of colonial India into a single banking entity.

The decision of his majesty's government was certainly influenced by the 1912 book "Indian Currency and Finance" authored by John Maynard Keynes.

The First Governor of The Imperial Bank was Rajah Sir Annamalai Chettiar.

On that day, the bank had 480 branches and sub-offices, as well as three local head offices; slightly more than a quarter of the resources of the Indian banking industry was under its control and command.