The largest bank, and the oldest still in existence, is the State Bank of India, which originated in
the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one
of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all
three of which were established under charters from the British East India Company. The three banks
merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became
the State Bank of India in 1955.
The Government of India issued an ordinance and nationalised the 14 largest commercial banks in
1969. These banks have 85 per cent of bank deposits in the country. A second round of nationalisation
of 6 more commercial banks took place in 1980. Nationalisation took place so that government get
more control of credit delivery. With the second round of nationalisation, 91% of banking business
was held by the Government of India. Later on, in the year 1993, the government merged New Bank of
India with Punjab National Bank. It was the only merger between nationalised banks and resulted in
the reduction of the number of nationalised banks from 20 to 19..