Banking services in India started way back in the 18^thcentury with the Bank of Bengal opening up in Calcutta in 1906. The other two banks thatopened up simultaneously were Bank of Bombay and Bank of Madras. These threemerged together to become Imperial bank of Indiawhich after independence became State Bank of India.As of today banks in Indiaare segregated into different groups, each having their own benefits &limitations of operating in Indiaalong with their dedicated markets. Some banks, mostly co-operatives operate inrural sectors where as the bigger ones, the multi-banking sectors caters torural & urban both. With passing years banks are increasing their range ofservices to their customers. With stiff competition and advancement oftechnology, the services provided by banks have become more easy andconvenient. Right from deposits to withdrawing to transfer of fund from onebranch/area to another anything could be done in an instant. Availing loans andcard banking has made things simpler for the customers. Gone are the days whenyou had to stand in a queue to encash your cheque or gathering money from allsources to make a major purchase. Card banking has also gain huge popularitywith majority of transactions in today's times being done with ATM cards,credit cards & debit cards.



 

In the last decade the financialmarkets of India shot upunexpectedly. Since 1990 every other state government took major steps in reformingthe financial sector of their respective states. Important sections such asfinancial markets, regulators, banking systems, non- banking financialcompanies, capital markets, mutual funds & consolidation imperatives werehandled with apt maturity. In case of financial markets private sectorinstitutions played an important role. They grew rapidly in commercial bankingand asset management business. With the openings of insurance competition arosewhich gradually helped reduce the interest rates. Regulators such as thereserve bank of India becamemore independent and the insurance regulatory and development authority becamemore important institutions. Public Sector Banks still dominate the commercialbanking system with their shares being enlisted in the stock markets. CapitalMarkets actively bring in customers to trade in stocks and bonds and with theintroduction of various mutual fund schemes more investments on differentassets are being made thereby making the regulation of finances all the more convenient.

 

As of today (2008), Banking Servicesin India is generally fair& mature in terms of supply, though reach in rural India still remains a challenge for privatesector & foreign banks. In terms of quality of assets & capitaladequacy, Indian banks are expected to have clean balance sheets compared toother foreign or private banks. The stated policy of the Bank on the IndianRupee is to manage volatility but without any fixed exchange rate-and this hasmostly been true. The stated policy of the Bank on the Indian Rupee is tomanage volatility but without any fixed exchange rate. With the growth in theIndian economy expected to be strong for quite some time-especially in itsservices sector-the demand for banking services, especially retail banking, mortgagesand investment services are expected to be strong. Currently, India has 88 scheduled commercial banks, 27public sector banks, 29 private banks & 31 foreign banks. This just showsas to how far the Indian Banking Services have improved since its creation.