A Legal and Economic Study of Selected Private Sector Bank: Performance Evaluation Pre and Post-merger

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.