- Post-Independence (1947-1969):
- Banking system was fairly developed with over 600 commercial banks.
- Imperial Bank transformed into SBI in 1955 to cover banking needs.
- Banks were perceived as biased towards trade and large firms.
- Nationalization Era (1969-1991):
- 14 major private banks nationalized in 1969, 6 more in 1980.
- Public sector banks’ share of deposits increased to 92%.
- Rapid branch expansion, especially in rural areas.
- Channelling of credit to priority sectors.
- Increased CRR and SLR requirements.
- Banks became unprofitable, inefficient, and unsound due to controls.
- Post-1991 Reforms (LPG):
- Banking sector opened to private competition (new private banks).
- Focus shifted to efficiency, competition, and financial stability.
- Narasimham Committees recommended deregulation and prudential norms.
- Dual regulation of PSBs by government and RBI continued.
- Establishment of regulatory bodies like SEBI.
- Introduction of new types of banks (Payment Banks, Small Finance Banks).