The Bank of Hindostan began operations in Calcutta, often cited as one of the earliest banks in India. Its existence shows that organized banking appeared in Bengal decades before the Presidency Banks, in a trading economy managed by the East India Company.
The British East India Company established the Bank of Calcutta in Calcutta (Kolkata). It was designed to support government and commercial finance in Bengal and became the first of the three Presidency Banks that later shaped Indian banking.
The Bank of Calcutta was renamed the Bank of Bengal. This marked the start of a long-lived institution that became the most prominent Presidency Bank and a major channel for government and trade-related banking in eastern India.
In the early 1800s, the Bank of Bengal issued its own banknotes, which supported trade by providing a widely used payment instrument. This role mattered because British India did not yet have a central bank, so large banks helped supply currency-like instruments.
The Bank of Bengal Act of 1839 set legal limits and conditions on the bank’s promissory notes (banknotes), including constraints on circulation. This shows how the colonial state increasingly regulated the Presidency Banks as their currency role grew.
The Bank of Bombay was established by charter, creating a Presidency Bank for western India. Along with the Bank of Bengal, it expanded the model of large, semi-public banks that blended commercial banking with public finance functions.
The Bank of Madras was established in Madras (Chennai) by amalgamating several existing regional banks. With this, British India had three Presidency Banks—Bengal, Bombay, and Madras—anchored in the three main presidencies.
The Paper Currency Act, 1861 created a government monopoly over note issue in British India. It removed (and then phased out) the Presidency Banks’ legal power to issue their own promissory-note currency, a major step toward centralized currency control.
After operating largely as unit banks (centered in one city), the Presidency Banks began building broader branch networks in the 1860s. This shift helped move banking beyond presidency capitals and into major ports and trading centers, widening access to credit and payments.
After 1861, the Presidency Banks initially acted as agents to help distribute and redeem Government of India notes using their branch infrastructure. The government later ended these agency agreements, reflecting a transfer of day-to-day currency administration away from the banks.
The three Presidency Banks—Bengal, Bombay, and Madras—were amalgamated into the Imperial Bank of India. The merger produced an all-India institution that combined large-scale commercial banking with several quasi-central banking functions in an era before the Reserve Bank of India.
Although the Presidency Banks ended as separate institutions in 1921, their organizational lineage continued through the Imperial Bank of India and later the State Bank of India. This legacy matters because it links the earliest presidency-based banking experiments to a modern national banking institution.
Presidency Banks in British India (Calcutta, Bombay, Madras) (1770–1861)