| A bank refers to a financial institution which receives funds from the public and gives loans and advances to those who need them. The Indian Banking Regulation Act of 1949 – Section 5 (1) defines bank as “Accepting of deposit of money from the public, for the purpose of lending or investment, repayable on demand or otherwise and withdrawable by cheque draft, order or otherwise”. Section 6 of the same act states that, a bank apart from above foresaid functions provides various subsidiary services to customers such as collection of cheques, drafts and bills, remittance of fund, acceptance and safe custody deposits etc., But the above definition was not comprehensive, as it didn’t include all branches of activities that a bank performs. Therefore definition of Sir John Paget is considered to be the comprehensive one, which quotes “No person or body corporate or otherwise can be a banker, who doesn’t take deposit account, take current a/c, issue and pay cheques and collect cheques, crossed and uncrossed, for his customer and one claiming to be a banker must profess himself to be one, the public must accept him as such and finally banking should be his main business”. There are many types of banks, like industrial banks, agricultural banks, exchange banks, commercial banks, etc. The ones we generally refer to are commercial banks. They perform all forms of banking businesses and deal in financial trade and commerce. The First Commercial Bank, “Bank of Hindoostan” was established in India in the year 1770. But it was maintained and managed by Britishers. The first Indian commercial bank was “The Oudh Commercial Bank” and was established in 1881. During this time, the Britishers, for the convenience of administration had divided India into three Provinces. They are Province of Bombay, Culcutta and Madras. In each these province, they had established a Presidency Bank. Later, these three presidency banks were merged into one and named as “The Imperial Bank of India’ on 27th Jan 1921. Later on this Imperial Bank of India was nationalised and renamed as ‘The State Bank of India’ on 1st July 1955. This was the first commercial bank, nationalized in our country. Nationalisation is |
