Which Was the First Bank in India?

First Bank in India: The Bank of Hindustan, founded in 1770 in Calcutta (now Kolkata), holds the distinction of being the first bank in India. Established by Alexander & Company, a British agency house, this bank introduced the country to modern financial systems during the early years of British rule. It handled deposits, currency exchange, and trade financing, laying the groundwork for India’s structured banking system.

Which Was the First Bank in India?

The Bank of Hindustan was founded by British traders from Alexander & Company to facilitate trade between India and Europe. At that time, Calcutta was the commercial hub of the East India Company, and there was an urgent need for an organised financial institution. The bank’s main goal was to provide credit facilities, handle bills of exchange, and support import-export activities.

This foundation marked the beginning of organised banking in India, replacing traditional moneylending practices with a regulated financial approach.

Headquarters and Operations in Calcutta

The head office of the Bank of Hindustan was set up in Calcutta, which served as the financial capital under the British. The bank managed commercial accounts for traders, companies, and planters. It introduced professional banking methods, including issuing promissory notes and managing remittances across regions.

However, weak regulations and over-reliance on foreign management led to financial instability. Eventually, the bank was liquidated in 1832 after 62 years of service.

Importance of the Bank of Hindustan

The Bank of Hindustan paved the way for India’s modern banking era. Its structure and functions became the model for future institutions such as the General Bank of India (1786) and the Bank of Bengal (1806). The latter evolved into one of the three Presidency Banks, which merged to form the State Bank of India (SBI) in 1955.

Top 5 Oldest Banks in India (2025)

1. State Bank of India (SBI) 

The State Bank of India traces its roots to the Bank of Calcutta, founded in 1806. It later became the Bank of Bengal and was one of the three Presidency Banks. After their merger in 1921 and nationalisation in 1955, SBI emerged as India’s largest and oldest surviving bank. It continues to dominate India’s banking sector with branches across the country and overseas.

2. Bank of Baroda 

Founded by Maharaja Sayajirao Gaekwad III in Vadodara (Baroda), the Bank of Baroda is one of India’s oldest and most trusted public sector banks. It has played a vital role in industrial financing and rural development. Today, it operates in more than 90 countries and remains a key player in India’s global banking presence.

3. Allahabad Bank 

The Allahabad Bank, established in 1865, was one of the first Indian-owned banks. Founded during the British Raj, it served traders and small businesses in Northern India. In 2020, it merged with Indian Bank, continuing its legacy as one of the oldest institutions in India’s banking history.

4. Punjab National Bank (PNB) 

The Punjab National Bank was established in Lahore (then part of undivided India) in 1894. It was founded entirely by Indians, including Lala Lajpat Rai, making it the first purely Indian-managed bank. PNB has a strong legacy of nationalist spirit and today ranks among India’s largest public sector banks.

5. Bank of India 

Founded in Mumbai in 1906 by a group of eminent businessmen, the Bank of India was the first Indian bank to open a foreign branch—in London in 1946. It introduced innovative banking services and contributed significantly to trade finance. Even today, it remains one of India’s major government-owned commercial banks.

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