Imperial Bank of India
Encyclopedia
The Imperial Bank of India (IBI) was the oldest and the largest commercial bank
Commercial bank
After the implementation of the Glass–Steagall Act, the U.S. Congress required that banks engage only in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S...

 of the Indian subcontinent
Indian subcontinent
The Indian subcontinent, also Indian Subcontinent, Indo-Pak Subcontinent or South Asian Subcontinent is a region of the Asian continent on the Indian tectonic plate from the Hindu Kush or Hindu Koh, Himalayas and including the Kuen Lun and Karakoram ranges, forming a land mass which extends...

, and was subsequently transformed into State Bank of India
State Bank of India
The State Bank of India is the largest Indian banking and financial services company with its headquarters in Mumbai, India. It is state-owned. The bank traces its ancestry to British India, through the Imperial Bank of India, to the founding in 1806 of the Bank of Calcutta, making it the oldest...

 in 1955.

Origin

The Imperial Bank of India came into existence on 27 January 1921 when the three Presidency Banks of colonial India
British Raj
British Raj was the British rule in the Indian subcontinent between 1858 and 1947; The term can also refer to the period of dominion...

, were reorganized and amalgamated to form a single banking entity. The three Presidency banks were the Bank of Bengal, established on 2 June 1806, the Bank of Bombay
Bank of Bombay
Bank of Bombay was the second of the three presidency banks of the Raj period. It was established, pursuant to a charter of the British East India Company, in the year 1868, about a decade after India's First War of Independence. The bank was headquartered in Bombay, now called Mumbai...

 (incorporated on 15 April 1840) and the Bank of Madras
Bank of Madras
The Bank of Madras, one of the three Presidency Banks, the other two being, the Bank of Bengal and the Bank of Bombay, was established on 1 July 1843, and was headquartered in Madras, now Chennai. It is now subsumed in the State Bank of India.-Origin:...

 (incorporated on 1 July 1843)

Activities

Imperial Bank of India performed all the normal functions which a commercial bank
Commercial bank
After the implementation of the Glass–Steagall Act, the U.S. Congress required that banks engage only in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S...

 was expected to perform. In the absence of any central banking institution
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...

 in India until 1935, the Imperial Bank of India also performed a number of functions which are normally carried out by a central bank.

Milestones

  • In 1924, at Apollo Street, currently called Mumbai Samachar Marg, Mumbai
    Mumbai
    Mumbai , formerly known as Bombay in English, is the capital of the Indian state of Maharashtra. It is the most populous city in India, and the fourth most populous city in the world, with a total metropolitan area population of approximately 20.5 million...

    , a magnificent stone structure http://www.tribuneindia.com/2005/20050626/spectrum/ with fretted windows, was constructed to house a branch of the Imperial Bank of India.
  • In 1933, Sir Badridas Goenka, an important public figure and business tycoon of his time, and a prominent member of Marwari community
    Marwaris
    Marwari or Marwadi or Rajasthani people are Indian ethnic group, that inhabit the Rajasthan region of India. Their language Rajasthani is a part of the western group of Indo-Aryan languages....

     of Calcutta
    Kolkata
    Kolkata , formerly known as Calcutta, is the capital of the Indian state of West Bengal. Located on the east bank of the Hooghly River, it was the commercial capital of East India...

    , became the first Indian to be appointed as the Chairman of the Imperial Bank of India.

Epilogue

The Reserve Bank of India
Reserve Bank of India
The Reserve Bank of India is the central banking institution of India and controls the monetary policy of the rupee as well as US$300.21 billion of currency reserves. The institution was established on 1 April 1935 during the British Raj in accordance with the provisions of the Reserve Bank of...

, which is the central banking organization
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...

 of India, in the year 1955, acquired a controlling interest in the Imperial Bank of India, and the Imperial Bank of India was christened on 30 April 1955 as the State Bank of India, and this transformation from the Imperial Bank of India to the State Bank of India was given legal recognition in terms off an Act of the Parliament of India
Parliament of India
The Parliament of India is the supreme legislative body in India. Founded in 1919, the Parliament alone possesses legislative supremacy and thereby ultimate power over all political bodies in India. The Parliament of India comprises the President and the two Houses, Lok Sabha and Rajya Sabha...

, which came into force from 1 July 1955. The day on which the Imperial Bank of India (IBI) became the State Bank of India, IBI had 480 branches, sub-offices, and three local head offices; and had under its control and command slightly more than a quarter of the resources of the Indian banking industry. The branch network of State Bank of India has since grown to 9093 branches as on 31 March 2004. In 2007 Reserve Bank of India transferred its stake in State Bank of India to Government of India.

Further reading

  • The Evolution of the State Bank of India Volume III (The Era of the Imperial Bank of India, 1921-1955) Edited by State Bank of India (ISBN 0-7619-9696-6)
  • THE EVOLUTION OF THE STATE BANK OF INDIA, Volume 1 — The Roots 1806-1876 by Amiya Kumar Bagchi http://www.hindu.com/br/2007/04/03/stories/2007040300301600.htm
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