Study notes
Static Banking Awareness - Revision Sheet
This is the highest-scoring static block in the SBI Clerk Mains GA section (typically 10-15 questions). Learn the dates, headquarters, Acts and sections below; most questions are direct recall.
1. Milestones in Indian banking history
| Year | Event |
|---|
| 1806 | Bank of Calcutta (later Bank of Bengal) - oldest root of SBI |
| 1840 / 1843 | Bank of Bombay / Bank of Madras (Presidency Banks) |
| 1894 | Punjab National Bank founded in Lahore (Lala Lajpat Rai associated) |
| 1911 | Central Bank of India - first bank fully owned and managed by Indians |
| 1921 | Three Presidency Banks merged into Imperial Bank of India |
| 1935 | RBI starts operations (1 April) |
| 1949 | Banking Companies Act (renamed Banking Regulation Act in 1966); RBI nationalised (1 January) |
| 1955 | Imperial Bank becomes State Bank of India (1 July) - Gorwala Committee |
| 1969 | 14 banks nationalised (19 July), deposits of Rs 50 crore or more; Lead Bank Scheme |
| 1975 | Regional Rural Banks set up (2 October) - Narasimham Working Group |
| 1980 | 6 more banks nationalised (15 April), deposits of Rs 200 crore or more |
| 1993 | New Bank of India merged with PNB (20 to 19 nationalised banks) |
| 2017 | Five SBI associates + Bharatiya Mahila Bank merged with SBI (1 April) |
| 2019 | Vijaya Bank + Dena Bank merged into Bank of Baroda (first three-way merger) |
| 2020 | Mega merger (1 April) - PSBs reduced to 12 |
| 2025 | One State, One RRB (1 May) - RRBs reduced from 43 to 28 |
2. The 2020 amalgamation (memorise the pairs)
| Anchor bank | Merged into it |
|---|
| Punjab National Bank | Oriental Bank of Commerce, United Bank of India |
| Canara Bank | Syndicate Bank |
| Union Bank of India | Andhra Bank, Corporation Bank |
| Indian Bank | Allahabad Bank |
3. The 12 public sector banks - HQ and tagline
| Bank | HQ | Tagline / note |
|---|
| State Bank of India | Mumbai | The Banker to Every Indian |
| Punjab National Bank | New Delhi | The Name You Can Bank Upon |
| Bank of Baroda | Vadodara | India's International Bank |
| Canara Bank | Bengaluru | Together We Can |
| Union Bank of India | Mumbai | Founded 1919 |
| Bank of India | Mumbai | First Indian bank with an overseas branch (London, 1946) |
| Indian Bank | Chennai | Founded 1907 |
| Indian Overseas Bank | Chennai | Founded 1937 |
| Central Bank of India | Mumbai | First credit card in India (1980) |
| UCO Bank | Kolkata | Honours Your Trust |
| Bank of Maharashtra | Pune | One Family One Bank |
| Punjab & Sind Bank | New Delhi | Where service is a way of life |
Trap: Canara Bank was founded in Mangalore but is headquartered in Bengaluru. Bank of Baroda's registered office is Vadodara (corporate office in Mumbai).
4. Key laws and sections
| Law | Section | What it covers |
|---|
| BR Act, 1949 | 5(b) / 5(c) | Definition of banking / banking company |
| BR Act, 1949 | 22 | Licence from RBI to carry on banking |
| BR Act, 1949 | 24 | Statutory Liquidity Ratio |
| BR Act, 1949 | 35A | RBI's power to issue directions |
| NI Act, 1881 | 4 / 5 / 6 | Promissory note / bill of exchange / cheque |
| NI Act, 1881 | 138 | Cheque bounce: up to 2 years jail or fine up to twice the amount |
| SARFAESI Act, 2002 | 13(2) | 60-day notice before taking possession |
| RDB Act, 1993 | - | Debt Recovery Tribunals (cases of Rs 20 lakh and above) |
| Banking Laws (Amendment) Act, 2025 | - | Up to 4 nominees; 'substantial interest' raised to Rs 2 crore |
SARFAESI does not apply to agricultural land, loans below Rs 1 lakh, or where the dues are less than 20% of principal and interest.
5. Cheques and instruments
- Parties to a cheque: drawer (writes it), drawee (bank), payee. A promissory note has two parties (maker, payee).
- Validity of cheques, drafts and pay orders: 3 months (since 1 April 2012).
- General crossing = two parallel lines; special crossing = bank's name between the lines; 'A/c Payee' = credit only to payee's account.
- CTS (Cheque Truncation System): image-based clearing, started in NCR in 2008.
- IFSC = 11 characters (4 letters bank code + 0 + 6 branch code); MICR = 9 digits.
6. Deposit accounts
| Account | Key feature |
|---|
| Savings | Interest on daily product basis (2010); rate deregulated in 2011 |
| Current | For businesses; usually no interest; overdraft possible |
| BSBDA | Zero balance; no other savings account in the same bank |
| NRE | Rupee account, repatriable, interest tax-free |
| NRO | Income earned in India; interest taxable |
| FCNR(B) | Foreign-currency term deposit, 1 to 5 years |
Banker-customer relationship: deposit = debtor (bank) and creditor (customer); locker = lessor and lessee; collection of cheques = agent and principal.
7. Payment systems
| System | Operator | Key facts |
|---|
| NEFT | RBI | 24x7 since 16 Dec 2019; half-hourly batches; no min/max |
| RTGS | RBI | 24x7 since 14 Dec 2020; minimum Rs 2 lakh; no upper limit |
| IMPS | NPCI | Launched 2010; limit Rs 5 lakh (from Oct 2021) |
| UPI | NPCI | Launched 11 April 2016; record 24.51 billion transactions in Aug 2026 |
| RuPay | NPCI | Domestic card scheme, 2012 |
| *99# | NPCI | USSD banking on feature phones |
NPCI (2008) is a Section 8 (not-for-profit) company promoted by RBI and IBA under the Payment and Settlement Systems Act, 2007.
8. Differentiated banks
| Feature | Payment Bank | Small Finance Bank |
|---|
| Committee | Nachiket Mor | Announced in Budget 2014-15 |
| Minimum capital | Rs 100 crore | Rs 200 crore (2019 on-tap norms) |
| Lending | Not allowed (no credit cards) | Allowed; 50% of loans up to Rs 25 lakh |
| Deposit limit | Rs 2 lakh per customer | No such limit |
| Priority sector | Not applicable | 60% of ANBC from 2025-26 (earlier 75%) |
| First to start | Airtel Payments Bank | Capital Small Finance Bank (April 2016) |
9. RRBs and cooperatives
- RRB Act, 1976; first RRB: Prathama Bank, Moradabad (sponsor Syndicate Bank).
- Shareholding: Centre 50%, sponsor bank 35%, State 15%. PSL target 75%.
- After 1 May 2025: 28 RRBs (One State, One RRB), authorised capital Rs 2,000 crore each.
- Short-term cooperative credit: State Cooperative Bank, DCCB, PACS (village level).
10. Customer protection
- DICGC (1978; RBI subsidiary): cover Rs 5 lakh per depositor per bank (since 4 Feb 2020; unchanged as of Oct 2026). PACS deposits are not covered.
- RB-Integrated Ombudsman Scheme: 12 November 2021, 'One Nation One Ombudsman'.
- Credit scores: 300-900; CICs regulated under the CIC (Regulation) Act, 2005.
- KYC: PMLA, 2002. OVDs: passport, driving licence, Aadhaar proof of possession, voter ID, NREGA job card, NPR letter (PAN is not an OVD). CKYC registry run by CERSAI.
Quick recall: first ATM in India - HSBC, Mumbai, 1987. Business Correspondent model - 2006. Lead Bank Scheme - 1969 (Gadgil Study Group).