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INTRODUCTION 1.1 Historical Perspective of Indian Banking The banking business is not new in India. In the 16th century onwards traditional banking was in the hands of private money lenders, indigenous bankers, etc. but the modern banking system was introduced by the East India Company. The first bank in India, called The General Bank of India was established in the year 1786. The East India Company established The Bank of Bengal/Calcutta (1809), Bank of Bombay (1840), and Bank of Madras (1843). The next bank was the Bank of Hindustan which was established in 1870. These three individual units (Bank of Calcutta, Bank of Bombay, and Bank of Madras) were called Presidency Banks. Allahabad Bank which was established in 1865 was for the first time completely run by Indians. Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore.

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