Banking in Karnataka

The state of Karnataka, particularly the region comprising the coastal districts of Dakshina Kannada and Udupi is called as the cradle of banking in India.cite web|url=http://www.flonnet.com/fl2221/stories/20051021002509200.htm|work=Online Webpage of The Frontline, Volume 22 - Issue 21, Oct. 08 - 21, 2005|title=Building on a strong base|author=Ravi Sharma|publisher=© 2005, Frontline|accessdate=2007-06-21] This is because seven of the country's leading banks, Canara Bank, Syndicate Bank, Corporation Bank, Vijaya Bank, Karnataka Bank, Vysya Bank and the State Bank of Mysore originated from this state. The first five in the above list of banks were established in the districts of Udupi and Dakshina Kannada. These districts have one among the best distribution of banks in India - a branch for every 500 persons.cite web|url=http://www.hinduonnet.com/fline/fl2015/stories/20030801002810400.htm|work=Online Edition of the Frontline, Volume 20 - Issue 15, July 19 - August 01, 2003|title=A pioneer's progress|author=Ravi Sharma|publisher=© 2003, Frontline|accessdate=2007-06-21] Between 1880 and 1935, 22 banks were established in coastal Karnataka, nine of them in the city of Mangalore.

Origin

The origin of banking in Karnataka's coastal region can be traced to the year 1868 when the Presidency Bank of Madras opened a branch to cater to the needs of British companies involved in exporting plantation produce. In the year 1912, the Indian Co-operative Societies Act in 1912 further energised the financial sector in this region leading to the establishment of a lot of co-operative societies. The freedom movement of India also played a crucial role as can be seen in the establishment of Karnataka Bank which was created as an offshoot of the swadeshi movement of 1905. These banks were earlier created to address the main sector in the economy i.e. agriculture but later they diversified to address other economical sectors as well.

Growth

The Indian Government's notification of nationalisation of banks in the year 1969 and 1980, resulted in lot of these banks being nationalised with the Indian Government now owning some amount of control over these banks. As of today, State Bank of Mysore, Canara Bank, Vijaya Bank and Vysya Bank have their headquarters in Bangalore, Corporation Bank and Karnataka Bank are headquartered in Mangalore while Syndicate Bank is headquartered in Manipal. The entry of the private sector into the banking sector with aggressive marketing has led these banks to rethink some of their strategies. Earlier, banking was the main activity that was undertaken by these banks but due to the competition, they have been forced to diversify into other areas like insurance, equity and mutual funds. They have also been forced to upgrade their technology and introduce services like ATMs and online-banking transactions.

As of March 2002, Karnataka had 4767 branches of different banks servicing the people of the state.cite web|url=http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/35585.pdf|title=State/Union Territory-Wise Number of Branches of Scheduled Commercial Banks and Average Population Per Bank Branch – March 2002|work=Online webpage of the Reserve Bank of India|accessdate=2007-06-21] The number of people served by each branch was 11,000 which is lesser than the national average of 16,000, thereby indicating better penetration of banking in the state.

Banks

The scheduled banks in Karnataka had total deposit of Rs. 1346.99 billion constituting 6.4% of the total deposits in scheduled banks in India as on March 2006. The credit given by these banks stood at Rs. 1034.55 billion, 6.8% of total credit given by scheduled banks. The per capita deposit stood at Rs. 23,976 and per capita credit at Rs. 18,415.

Canara Bank

Canara Bank was established in the year 1906 by Ammembai Subba Rao Pai who collected handful of rice from each household, pooled the rice and sold it and used the money earned for the bank's capital. It has grown since then and now has 2542 branches in India and one overseas branch in London.cite web|url=http://www.canbankindia.com/locator/network.html|title=Branches and Offices|work=Online Webpage of The Canara Bank|accessdate=2007-06-21] In the fiscal year 2005-06, Canara Bank became India's second-largest public sector bank in terms of advances and deposits.cite web|url=http://www.rediff.com/money/2007/may/09canara.htm|work=Online webpage of The Rediff.com, dated 2007-05-09|title=Canara Bank eyes Dena, appoints E&Y for deal|publisher=© 2007 Rediff.com India Limited|accessdate=2007-06-21] In 2002-03, the bank went in for its Initial Public Offer (IPO) and raised Rs.110 crores. The India government holds a 73% stake in Canara Bank.

tate Bank of Mysore

State Bank of Mysore (SBM) was established in the year 1913 under the name Bank of Mysore Ltd.cite web|url=http://www.statebankofmysore.co.in/profile.htm|title=Our Profile|work=Online webpage of the State Bank of Mysore|accessdate=2007-06-21] A banking committee headed by Sir M Visweswaraiah was formed under the patronage of the Mysore state which led to the formation of this bank. In the year 1960, this bank was made an associate bank of the State Bank of India which holds 92.33% of shares of SBM. As of Mar-2007, SBM has 644 branches and provides employment to 9604 employees.

yndicate Bank

Syndicate Bank was established in the town of Udupi in 1925 under the name "Canara Industrial and Banking Syndicate Ltd" with a capital of Rs.8000/- by three people - Upendra Ananth Pai, Vaman Kudva, and Dr. T M A Pai.cite web|url=http://syndicatebank.in/asp/0100text.asp?pageId=69|title=About Us|work=Online webpage of The Syndicate Bank|accessdate=2007-06-21] The main objective for stating the bank was to extend financial assistance to the local weavers who were crippled by a crisis in the handloom industry. In 1963, it got its present name of Syndicate Bank. Now the bank has 2125 branches.

Corporation Bank

Corporation Bank was founded by a group philanthropists headed by Khan Bahadur Haji Abdulla Haji Kasim Saheb Bahadur in the town of Udupi in the year 1906 under the name of "The Canara Banking Corporation (Udupi) Ltd.".cite web|url=http://www.corpbank.com/asp/0100text.asp?presentID=84&headID=47|title=History|work=Online webpage of the Corporation Bank|accessdate=2007-06-21] In 1972, it got its present name of Corporation Bank and it was nationalised in 1980.

Karnataka Bank

The Karnataka Bank was found on 18 February 1924 at Mangalore.The bank initially catered to people of Karnataka ,has now spread its network of branches through out the country.

Notes

External links

* [http://www.metlife.co.in/MetIndia/About%20Us/Partnership/Karnataka%20Bank/KarnatakaBank.HTML?QryStr=prtnrKarId MetlifeIndia retrieved on 2007/06/19 ]
* [http://karnatakabank.com/ktk/Index.jsp Karnataka Bank Website]
* [http://www.corpbank.com/ Corporation Bank Website]
* [http://www.statebankofmysore.co.in/profile.htm#branch State Bank of Mysore Website]
* [http://www.canbankindia.com/aboutus/history/fp-ind.html Canara Bank Website]
* [http://syndicatebank.in/ Syndicate Bank Website]
* [http://www.vijayabank.com/ Vijaya Bank Website]
* [http://www.rbi.org.in/scripts/PublicationsView.aspx?id=8914 RBI Publications]