Karnataka > Banking, Co-Operatives And Trade
In the absence of strict regulatory measures which came much later, especially after independence, the promoting of a banking company was much easier. Small banking companies with a limited capital base and inexperienced management were the common features. There was a mushroom growth of banking. Even in semi-urban and rural areas banks were promoted. Nearly half of the total number of banks born in the State was registered during 1930-1940. The Swadeshi movement also contributed much for the growth of commercial banking activities in the State, specially promoted by the local traders. Most of these banks had a limited life span. In those days, the banks were started with impressive names to attract the customers, especially on the basis of religion, caste and community. Many a time, local community spirit reflecting itself in commercial spirit contributed much for the faster growth of community banking. This tendency was very much evident especially in Dakshina Kannada (South Kanara), which is said to be the cradle of modern banking industry in Karnataka. The contributions of Dakshina Kannada district to the modern banking industry are unique. Branch banking was started here as early as in 1923. During the period of four decades 1906-1945, the district became the cradle and creche in nursing as many as 22 banks.
In different Parts of integrated areas of Karnataka, sporadic commercial banking activities were ushered in at different times based on local demand, expertise and economic potentialities. In princely Mysore the period of Commissioner's rule (1831-1881) was of great significance which ushered in an era of modernisation by adopting the British system of administration in all spheres including banking. The establishment of Bangalore Cantonment in 1809 and shifting of the State Secretariat from Mysore to Bangalore in 1831 gave a fillip to commercial and industrial activity in Bangalore which was partly supported by the banking institutions.
The joint stock banks that were promoted in princely Mysore were Bangalore based banks i.e., Bangalore Bank Ltd and Mysore Bank Corporation Ltd., both registered in 1868 with a share capital of Rs. 7 lakhs and Rs. 2 1akhs respectively. As said earlier, Bangalore City including the then Cantonment area had a rich potentiality and infrastructure which boosted the growth of banking both in the organised and unorganised sectors. During 1868-1876, there were nearly 24 banking companies operating in Bangalore City area. During the period of six decades i.e., from 1890 to 1949 about 12 banking companies were founded in Bangalore City but all did not survive. Among the Bangalore based banks, the Bangalore Union Bank founded in 1890 had a longest service of fifty years before its liquidation in 1940. The Devanga Bank (1926) was amalgamated with the Vijaya Bank in 1963. The Vysya Bank (1930) and the Bank of Mysore (1913) survived, the latter becoming State Bank of Mysore later.
The royal capital, Mysore, did not lag behind in promoting joint stock banks. In 1874 (six years later than Bangalore), two banking companies, viz., the Rajadhani Bank and the Town Bank of Mysore were promoted here and continued to function not beyond 1913. A decade thereafter, in 1885 Nanjangudu Srikanteswara Swamy Bank was promoted. This is the only bank which served for nearly 80 years till its licence was refused in 1965. During the period of two-and-a half decades (1884-1908) as many as 17 joint stock companies were promoted here, combining banking and trading. Among the oldest banks of the princely Mysore which are no more now, a mention may be made of Chitradurga Savings Bank founded in 1870 at Chitradurga which had a record service of nearly 96 years before its merger with Karnataka Bank Ltd in 1966. Related tags of Banks, Co-Operatives, Trade Agricultural Banks
Co-operative Movement
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