Banks in India and their history - Banking awareness questions on current affairs

1)   The liberalization of Indian Banking and Regulation was done based on recommendation of _______?
- Published on 17 Feb 17

a. R Gandhi Committee
b. Narasimham Committee
c. Basel Committee
d. Khusro Committee
Answer  Explanation 

ANSWER: Narasimham Committee

The Narasimham Committee was established under former RBI Governor M. Narasimham in August 1991 to look into all aspects of the financial system in India.

The report of this committee had comprehensive recommendations for financial sector reforms including the Indian banking sector and capital markets.

2)   In April 1980, ____ banks were nationalized in India?
- Published on 17 Feb 17

a. 3
b. 5
c. 6
d. 7
Answer  Explanation 


In 1980, to provide government more power and command over credit delivery, six commercial banks in India were nationalized.

  • Andhra Bank
  • Corporation Bank
  • Oriental Bank of Commerce
  • New Bank of India
  • Vijaya Bank
  • Punjab and Sind Bank
Additionally, in 1993, New Bank of India merged with Punjab National Bank (PNB).

3)   How many banks were nationalized in India in the year 1969?
- Published on 17 Feb 17

a. 12
b. 29
c. 14
d. 6
Answer  Explanation 


The Government of India issued an ordinance ('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969') and nationalized the 14 largest commercial banks with effect from the midnight of 19 July 1969.

Following is the list of 14 major banks that were nationalized -

  • Central Bank of India
  • Bank of Maharashtra
  • Dena Bank
  • Punjab National Bank
  • Syndicate Bank
  • Canara Bank
  • Indian Bank
  • Indian Overseas Bank
  • Bank of Baroda
  • Union Bank
  • Allahabad Bank
  • United Bank of India
  • UCO Bank
  • Bank of India

4)   In which year were the Subsidiaries of SBI nationalized?
- Published on 17 Feb 17

a. 1955
b. 1949
c. 1959
d. 1969
Answer  Explanation 

ANSWER: 1959

The State Bank of India (Subsidiary Banks) Act was passed in 1959.

The Act enabled the State Bank of India to make the eight former State-associated banks as its subsidiaries.

Out of 8, only 5 are still working and will soon be merged with SBI.

Note that, the current five associate banks are :

  • State Bank of Bikaner and Jaipur (SBBJ)
  • State Bank of Hyderabad (SBH)
  • State Bank of Mysore (SBM)
  • State Bank of Patiala (SBP)
  • State Bank of Travancore (SBT)

5)   Imperial Bank of India was nationalized in which year?
- Published on 16 Feb 17

a. 1945
b. 1955
c. 1949
d. 1965
Answer  Explanation 

ANSWER: 1955

The Imperial Bank of India was nationalized in 1955.

The largest bank, and the oldest still in existence, is the State Bank of India (S.B.I).

It originated as the Bank of Calcutta in June 1806.
In 1809, it was renamed as the Bank of Bengal.

This was one of the three banks funded by a presidency government, the other two were the Bank of Bombay and the Bank of Madras.

The three banks were merged in 1921 to form the Imperial Bank of India, which upon India's independence, became the State Bank of India in 1955.

6)   What was the State Bank of India called before it was created through SBI Act?
- Published on 16 Feb 17

a. Bank of Hindustan
b. Bank of Madras
c. Imperial Bank of India
d. Imperial Bank of Calcutta
Answer  Explanation 

ANSWER: Imperial Bank of India

The Imperial Bank of India was baptized as State Bank of India followed by the formation of 7 associate banks in 1959.

Recognizing the fact that banking plays a crucial role in the economic development of a country, the Government of India nationalized 14 major commercial banks in July 1969.

Another six commercial banks were nationalized in April 1980.

7)   Which of the following was the first Indian bank to open a branch on foreign soil?
- Published on 16 Feb 17

a. Bank of Baroda
b. Bank of India
c. Punjab National Bank
d. Bank of Allahabad
Answer  Explanation 

ANSWER: Bank of India

Bank of India is the first Indian bank to open branch outside India at London in 1946.

Bank of India (BoI) is a commercial bank with headquarters in Mumbai, Maharashtra, India.

BoI – Bank of India

Founded : 7 September 1906; 110 years ago
Headquarter : Mumbai, India
Current Head : Melwyn Rego (MD & CEO)

8)   In which year was The Banking Regulation Act passed in India?
- Published on 16 Feb 17

a. 1947
b. 1935
c. 1949
d. 1965
Answer  Explanation 

ANSWER: 1949

The Banking Regulation Act, 1949 is a legislation in India that regulates all banking firms in India.

Initially, the law was applicable only to banking companies.

But, 1965 it was amended to make it applicable to co-operative banks and to introduce other changes.

9)   Original headquarters of RBI were located at which of the following place?
- Published on 15 Feb 17

a. Calcutta
b. Bombay
c. Delhi
d. Chennai
Answer  Explanation 

ANSWER: Calcutta

Original headquarters of RBI were in Kolkata.

In 1937, it was shifted to Shahid Bhagat Singh Marg, Mumbai.

Following India's independence on 15 August 1947, the RBI was nationalized on 1 January 1949.

The Reserve Bank of India has zonal offices at Chennai, Delhi, Kolkata and Mumbai.

It has 19 regional offices and 10 sub-offices.

Regional offices are in Ahmedabad, Bangalore, Bhopal, Bhubaneswar, Chandigarh, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Jammu, Kanpur, Kochi, Kolkata, Lucknow, Mumbai, Nagpur, Patna and Thiruvananthapuram.

10)   On which date was the Reserve Bank of India established?
- Published on 15 Feb 17

a. April 1, 1935
b. July 12, 1982
c. January 1, 1949
d. August 15, 1947
Answer  Explanation 

ANSWER: April 1, 1935

On April 1, 1935, the Reserve Bank of India, which is the central bank of this country, was established.

It was originally started as a shareholders' bank with a share capital of Rs. 5 crore divided into shares of Rs. 100 each, fully paid-up.

But since January, 1949 the Reserve Bank has been nationalized and it is now purely a concern of the State.

The Government of India holds the entire share capital of the bank which has been acquired by payment of compensation to the shareholders.

RBI – Reserve Bank of India

Founded : 1 April 1935; 81 years ago
Headquarter : Mumbai, India
Current Governor : Urjit Patel (September 2016 - Present)

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