ABSTRACT
This chapter discusses the early beginnings of banking in terms of its initial spread and institutional types. It describes the first major government-led expansion of banking, when the few presidency banks were amalgamated into the Imperial Bank of India in 1921. The chapter analyzes the noticeable narrowing down of banking activity in India—narrowing geographical coverage, decreasing exposure to agriculture and confinement to more profitable regions—post the financial sector reforms. The British introduced limited liability joint-stock banking, the issuing of bank notes and deposit banking into India. Banking in the colonial period had four constituents: exchange banks, the presidency banks, the Indian joint-stock banks and cooperative credit societies. The general tendency of the expansion of banking in the country was characterized by the Imperial Bank of India pioneering a branch in a new place and others hastening in its wake.
