Abstract:
Private banking in India was practiced since the beginning of banking system in India. After the
nationalization of 14 larger banks in 1969, no banks were allowed to be set up in the private sector. In the prereforms
period, there were only 24 banks in the private sector. The Narsimha Committee in its first report
recommended the freedom of entry into the financial system only if certain guidelines were followed. The
Reserve Bank of India considered the above recommendations and allowed banks to be set up in private sector.
Thus in this way private sector banks entered the Indian Financial System. The first Private Bank in India to
receive an in principle approval from the Reserve Bank of India was Housing Development Finance Corporation
Limited, to set up a bank in the private sector as a part of the RBI‟s liberalization policy regarding Indian
Banking Industry. It was incorporated in August 1994 as HDFC Bank Limited with registered office in Mumbai
and commenced the banking operations as Scheduled Commercial Bank in the year January 1995.
