Banking in

Karnataka

The state of Karnataka, particularly the

coastal districts of Dakshina Kannada and
Udupi, historically and collectively known
as South Canara, is called the cradle of
banking in India.[1] 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.[1] 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.[2] 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.[1] In 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.
 Bank Place of origin Year

Canara Bank Mangalore 1906

Karnataka Bank Mangalore 1924

Vijaya Bank Mangalore 1931

Corporation Bank Udupi 1906

Syndicate Bank Udupi 1925

Vysya Bank Bangalore 1930

State Bank of Mysore N/A 1913

Growth
The Indian Government's notification of
nationalisation of banks in 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.[3] 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.[3]

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 of 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 1906 by

Ammembai Subba Rao Pai established the
Canara Bank Hindu Permanent Fund in
Mangalore, India, on 1 July 1906.Who
collected handful of rice from each
household, pooled the rice and sold it and
used the money earned for the bank's
capital.[2] It has grown since then and now
has 2542 branches in India and one
overseas branch in London.[4] In the fiscal
year 2005-06, Canara Bank became India's
second-largest public sector bank in terms
of advances and deposits. The bank
changed its name to Canara Bank Limited
in 1910 when it incorporated.[5] In 2002-03,
the bank went in for its Initial Public Offer
(IPO) and raised Rs.110 crores.[2] The India
government holds a 73% stake in Canara
Bank.[5]

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 1906 under the name
of "The Canara Banking Corporation (Udupi)
Ltd". [6] In 1972, it got its present name of
Corporation Bank and it was nationalised
in 1980.

State Bank of Mysore …

State Bank of Mysore (SBM) was

established in 1913 under the name Bank
of Mysore Ltd.[7] 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 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.[7]

Karnataka Bank …

The Karnataka Bank was founded on 18

February 1924 at Mangalore.The bank
initially catered to people of Karnataka,
has now spread its network of branches
throughout the country.

Syndicate 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.[8] 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.[8] Now
the bank has 2125 branches.

Vysya Bank …

Vysya Bank was established in 1930, in

Bangalore (now Bengaluru) with the aim of
offering banking services to those who
were currently not privileged enough to do
so. In 1948 Vysya Bank became a
scheduled bank. On 7 October 2002 ING
Group took over the Management of the
Bank. But again ING Vysya Bank has
merged with Kotak Mahindra Bank with
effect from April 1, 2015 and the combined
entity bears the name Kotak Mahindra
Bank.[9] Before merger ING Vysya Bank
had about 470 branches spread all over
India.

Vijaya Bank …

Vijaya Bank was established on 23

October 1931 at coastal city Mangalore by
A. B. Shetty and others. The bank was
established to help farming community.
Later bank grew phenomenally under
leadership of Mulki Sunder Ram Shetty
during the 1960s. The Vijaya bank was
nationalised in the 1980s by Government
of India. The bank has presence in most of
states of India. Later it was merged with
Bank of Baroda along with Dena Bank.

See also
Banking in India
Pigmy Deposit Scheme

Notes
1. Ravi Sharma. "Building on a strong
base" . Online Webpage of The
Frontline, Volume 22 - Issue 21, Oct.
08 - 21, 2005. © 2005, Frontline.
Archived from the original on 2007-
10-07. Retrieved 2007-06-21.
2. Ravi Sharma. "A pioneer's progress" .
Online Edition of the Frontline, Volume
20 - Issue 15, July 19 - August 01,
2003. © 2003, Frontline. Retrieved
2007-06-21.
3. "State/Union Territory-Wise Number of
Branches of Scheduled Commercial
Banks and Average Population Per
Bank Branch – March 2002" (PDF).
 Online webpage of the Reserve Bank
of India. Archived from the original
(PDF) on 2007-08-10. Retrieved
2007-06-21.
4. "Branches and Offices" . Online
Webpage of The Canara Bank.
Archived from the original on 2007-
06-06. Retrieved 2007-06-21.
5. "Canara Bank eyes Dena, appoints E&Y
for deal" . Online webpage of The
Rediff.com, dated 2007-05-09. © 2007
Rediff.com India Limited. Archived
from the original on 15 July 2007.
Retrieved 2007-06-21.
6. "History" . Online webpage of the
Corporation Bank. Archived from the
original on 9 June 2007. Retrieved
2007-06-21.
7. "Our Profile" . Online webpage of the
State Bank of Mysore. Archived from
the original on 28 June 2007.
Retrieved 2007-06-21.
8. "About Us" . Online webpage of The
Syndicate Bank. Archived from the
original on 2007-02-27. Retrieved
2007-06-21.
9. "Archived copy" . Archived from the
original on 2015-08-20. Retrieved
2015-08-07.
External links
MetlifeIndia retrieved on 2007/06/19
Karnataka Bank Website
Corporation Bank Website
State Bank of Mysore Website
Canara Bank Website
Syndicate Bank Website
Vijaya Bank Website
RBI Publications

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