The banking business of agency houses that survived and continued to carry on trade and banking together was progressively taken over by the presidency banks.
The three Presidency Banks Viz-
- The bank of Bengal (1809)
- The Bank of Bombay (1840)
- The bank of Madras (1843)
Charter of the East India company. These banks acted as a bank to the East India Company at Calcutta, Bombay, and Madras and performed Central Banking functions for their respective areas.
A) Bank of Bengal:
The bank of Bengal was set up in 1806 and it obtained it’s Charter in 1809. The establishment of the Bank of Bengal marked the advent of joint-stock banking in India.
The bank of Bengal was set up with a capital of Rs 50 lakes divided into 500 equity shares of Rs 10000 each. The Bengal government contributed 100 shares.
The charter gave the power of note issues to the Bank in 1823 and the fixed the maximum rate of interest of the bank at 12 percent per anum.
In 1839, the bank was allowed to open branches and to deal with inland exchanges. It took the responsibility of public debt management from 1865.
B) Bank Of Bombay:
The bank of Bombay, the second presidency bank was established in 1840 with the share capital of Rs 52.25 lakhs.
The bank was given the power to deal with inland exchanges, public debt and also to open branches.
C) Bank of Madras:
The Bank of Madras, the third presidency bank was established in 1843 with the share capital of Rs 30 lakes. The bank also acted like the other two presidency banks.
I) What is the Lead Bank Scheme?
The lead bank scheme was introduced in December 1969 to promote the integrated development of each district of the country.
Under this scheme, a commercial bank was assigned the lead role in a district and all other financial institutions work jointly under the lead banks.
II) What are Agency houses:
The indigenous bankers lost their importance to a certain extent with the advent of the English traders in India.
The genesis of banking on modern lines in India can be traced to the beginning of the east India company’s trade relation with our country.
The growing trade interest of the English merchants and nonexistence of any organized banks in India prompted many English agency houses which were essentially trading companies to add banking business to their business.
For instance, M/S Alexander and company and M/s Fergusson and company, both trading firms, combined banking with other kinds of business and both were the predecessors of the early joint-stock bank In India.
The bank of Hindustan was the earlier bank begun under European heading in India.
Frequently Questions And Answers:
1. What was the first presidency bank of India?
Ans: Bank of Calcutta was the first presidency bank in India.
2. What was the Share Capital of Bank of Calcutta?
Ans: The bank of Bengal was set up with a capital of Rs 50 lakes divided into 500 equity shares of Rs 10000 each.
3. What was the maximum interest rate of the bank of Calcutta?
Ans: The fixed the maximum rate of interest of the bank at 12 percent per anum.
4. In which year the bank of Calcutta took the responsibility of public debt Management?
Ans: In the year 1985 Bank of Calcutta took the responsibility of public debt management.
5. When Bank of Bombay was founded?
And: Bank of Bombay was founded in the year 1840.
6. What was the share capital of the bank of Bombay?
Ans: The share capital of the Bank of Bombay was Rs 52.25 lakhs.
7. When Bank of Madras was founded?
Ans: Bank of Madras was founded in the year 1843.
8. What was the share capital of the Bank of Madras?
Ans: The share capital of the Bank of Madras was Rs 30 lakes.
9. Why the lead bank scheme was introduced?
Ans: The lead bank scheme was introduced in December 1969 to promote the integrated development of each district of the country.