Banking Sector – Complete GK Capsule for Railway Exams
1. Overview of Indian Banking
- Regulator: Reserve Bank of India (RBI) – established 1 April 1935 (nationalised 1 Jan 1949)
- Scheduled Banks: 149 (2024); Commercial banks 12 PSBs + 21 Private + 46 Foreign + 43 RRBs + 11 Small Finance Banks + 6 Payments Banks
- Total Bank Branches: 1.58 lakh (2024)
- Total ATMs: 2.15 lakh (2024)
- Banking Density: 1 branch per 1,640 Indians
2. Types of Banks in India
| Category | Number (2024) | Examples | Key Feature |
|---|
| Public Sector Banks (PSBs) | 12 | SBI, PNB, BOB | ≥50 % govt. stake |
| Private Sector Banks | 21 | HDFC, ICICI, Axis | Majority private equity |
| Foreign Banks | 46 | Citi, HSBC, StanChart | Head office outside India |
| Regional Rural Banks (RRBs) | 43 | Uttar Bihar Gramin Bank | Joint: Centre(50 %)+State(15 %)+Sponsor PSB(35 %) |
| Small Finance Banks | 11 | AU, Equitas, Ujjivan | Focus on unserved sectors |
| Payments Banks | 6 | Airtel PB, Paytm PB | Deposit ₹1 lakh max; no lending |
| Co-operative Banks | 1,539 UCB + 96,000 RCBs | Saraswat, Punjab & Maharashtra | Dual control: RBI + State |
| Development Finance Institution | 1 | NaBFID (2022) | Infra-lending long-term |
3. Evolution Timeline – Must-Know Dates
| Year | Event |
|---|
| 1770 | First Indian bank—Bank of Hindustan (Calcutta) |
| 1806 | Bank of Calcutta → Bank of Bengal (1 of 3 Presidency banks) |
| 27 Jan 1921 | Imperial Bank of India (merger of 3 Presidency banks) |
| 1 Apr 1935 | Reserve Bank of India constituted |
| 1 Jul 1955 | Imperial Bank converted into State Bank of India |
| 19 Jul 1969 | First Nationalisation – 14 major PSBs |
| 15 Apr 1980 | Second Nationalisation – 6 more PSBs |
| 1991 | Narasimham Committee-I – LPG reforms |
| 1998 | Narasimham Committee-II – Stronger PSBs |
| Apr 2014 | RBI licences 2 PBs & 10 SFBs via Nachiket Mor panel |
| 1 Apr 2015 | Pradhan Mantri Jan-Dhan Yojana completes 15.4 cr accounts |
| 2016 | UPI launched (11 Apr) – NPCI |
| 30 Aug 2019 | Mega PSB Merger – 27 → 12 |
| 1 Apr 2022 | NaBFID functional |
| 2023 | RBI launches CBDC (e₹) pilot wholesale & retail |
4. Nationalisation Details
First (19 Jul 1969) – 14 Banks
Allahabad, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara, Central Bank, Dena, Indian, Indian Overseas, Punjab National, Syndicate, UCO, Union, United Commercial.
Second (15 Apr 1980) – 6 Banks
Andhra, Corporation, New Bank of India, Oriental, Punjab & Sind, Vijaya.
5. Important Mergers (Post-2000)
| Acquirer (Surviving) | Merged Entity | Effective Date |
|---|
| SBI | Associate Banks (5) + Bharatiya Mahila Bank | 1 Apr 2017 |
| PNB | Oriental Bank + United Bank | 1 Apr 2020 |
| BOB | Dena + Vijaya | 1 Apr 2019 |
| Canara | Syndicate | 1 Apr 2020 |
| Union | Andhra + Corporation | 1 Apr 2020 |
| Indian | Allahabad | 1 Apr 2020 |
6. Taglines & Headquarters (Top-10)
| Bank | HQ | Tagline |
|---|
| SBI | Mumbai | “The Nation banks on us” |
| PNB | New Delhi | “The Name you can Bank Upon” |
| BOB | Vadodara | “India’s International Bank” |
| Canara | Bengaluru | “Together we Can” |
| HDFC | Mumbai | “We Understand Your World” |
| ICICI | Mumbai | “Khayaal Aapka” |
| Axis | Mumbai | “Badhti Ka Naam Zindagi” |
| Central Bank | Mumbai | “Central to you since 1911” |
| UCO | Kolkata | “Honours Your Trust” |
| Indian | Chennai | “Taking Banking Technology to Common Man” |
7. Key Banking Indices & Reports
- Financial Inclusion Index (FI-Index) – RBI; 2024 value: 60.1 (out of 100)
- EASE (Enhanced Access & Service Excellence) – Annual PSB reforms; 6th edition 2023-24
- BANKEX – BSE banking sector index (15 stocks)
- Nifty PSU Bank Index – 12 stocks
8. Regulatory & Development Acts
| Act | Year | Purpose |
|---|
| RBI Act | 1934 | Constituted RBI & note issue |
| Banking Regulation Act | 1949 | Licencing, management, inspection |
| SBI Act | 1955 | Created SBI |
| Nationalisation Acts | 1970/1980 | Enabled take-over |
| Banking Companies (Acquisition & Transfer) Act | 1969 | First nationalisation |
| DICGC Act | 1961 | Deposit insurance (₹5 lakh cover) |
| SARFAESI Act | 2002 | NPAs & asset reconstruction |
| IBC | 2016 | Insolvency resolution |
| FRDI Bill (lapsed) | 2017 | Bail-in proposal |
9. Deposit Insurance & Credit Guarantee Corporation (DICGC)
- Subsidiary of RBI
- Insurance limit: ₹5 lakh per depositor per bank (since 4 Feb 2020 – raised from ₹1 lakh)
- Covers: SB, CA, RD, FD – commercial, co-op, local & PBs
- Not covered: Deposits of foreign govts, central/state govts, inter-bank
10. Priority Sector Lending (PSL) – RBI norms 2024
| Category | Target for PSBs |
|---|
| Agriculture | 18 % (of ANBC*) |
| Micro & small enterprises | 7.5 % |
| Weaker sections | 12 % |
| Overall PSL | 40 % |
| *ANBC = Adjusted Net Bank Credit | |
11. Digital Initiatives (2020-24)
| Platform | Owner | Use |
|---|
| UPI | NPCI | Real-time P2P, P2M |
| BharatPe, PhonePe | Private | UPI apps |
| CBDC (e₹) | RBI | Pilot retail in 15 cities |
| 123PB | RBI | Unified portal for payments banks |
| Account Aggregator (AA) | RBI-licensed | Consent-based data sharing |
12. One-Liner Quick Facts (Revision Capsule)
- SBI is the largest commercial bank by assets (>₹55 lakh cr).
- Punjab National Bank is the first Swadeshi bank (1895, Lahore).
- Bank of Baroda has the highest overseas branches among PSBs (95+).
- HDFC Bank has the highest market-cap (>₹11 lakh cr).
- RBI’s 25th Governor: Shaktikanta Das (appointed 12 Dec 2018).
- RBI prints currency through 4 presses: Dewas, Nashik, Mysore, Salboni.
- RBI’s logo inspired from East India Company’s double mohur.
- Financial inclusion campaign: PMJDY – Guinness record 55 cr+ accounts.
- RRBs capital shared – 50:15:35 (Centre:State:Sponsor).
- DICGC cover – ₹5 lakh includes principal + interest.
- Negotiable Instruments: Cheque, BoE, Promissory Note.
- Base rate replaced by MCLR (2016); now External Benchmark (EBLR) since 2019.
- CRR: 4.5 %, SLR: 18 % (May 2024).
- Repo rate: 6.50 %, Reverse repo: 3.35 %, MSF: 6.75 %.
- IBC 2016 trigger threshold: ₹1 cr (raised from ₹1 lakh).
Quick-Reference Tables
Table-1: RBI Governors (Last 5)
| Name | Tenure |
|---|
| Shaktikanta Das | 2018 – incumbent |
| Urjit Patel | 2016 – 2018 |
| Raghuram Rajan | 2013 – 2016 |
| D. Subbarao | 2008 – 2013 |
| Y. V. Reddy | 2003 – 2008 |
Table-2: Asset Quality (Gross NPA %)
| Bank | Mar-24 |
|---|
| SBI | 2.78 % |
| PNB | 5.73 % |
| BOB | 3.55 % |
| HDFC | 1.17 % |
| ICICI | 2.49 % |
15+ MCQs for Practice
1. Which was the first Indian bank to be nationalised in 1969?
Answer: **Punjab National Bank** (among the 14).2. The Reserve Bank of India was nationalised in which year?
Answer: **1949**.3. How many public sector banks exist in India after the 2019-20 merger?
Answer: **12**.4. The deposit insurance cover per depositor is:
Answer: **₹5 lakh**.5. Which committee recommended the establishment of Small Finance Banks?
Answer: **Nachiket Mor Committee**.6. The headquarters of the State Bank of India is located at:
Answer: **Mumbai**.7. Which bank is known as “India’s International Bank”?
Answer: **Bank of Baroda**.8. UPI was launched by which organisation?
Answer: **NPCI** (National Payments Corporation of India).9. The minimum priority sector lending target for domestic commercial banks is:
Answer: **40 % of ANBC**.10. The Central Bank Digital Currency (e₹) pilot was launched in which year?
Answer: **2022**.11. Which act empowers banks to recover NPAs without court intervention?
Answer: **SARFAESI Act, 2002**.12. The acronym “MCLR” stands for:
Answer: **Marginal Cost of Funds based Lending Rate**.13. Which bank was formed by the merger of Dena Bank and Vijaya Bank?
Answer: **Bank of Baroda** (effective 1 Apr 2019).14. Who is the ex-officio Chairman of the RBI Central Board?
Answer: **Governor of RBI**.15. The first Regional Rural Bank “Prathama Grameen Bank” was sponsored by:
Answer: **Syndicate Bank**.16. Negotiable Instruments Act was enacted in:
Answer: **1881**.
Last update: May 2024 | Source: RBI Bulletin, DFS, NPCI, IBEF.
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