Before the independence, the banking system in India wasprimarily associated with urban sector. After independence, the banks had to spread out into rural and un-banked areas and make credit available to the people of those areas.

Therefore, in 1950, the Imeprial Bank of India expanded its offices in rural areas also and was brought under control of the Government in July 1955 and was renamed as State Bank of India.

On 19 July, 1969, the government nationalised 14 major banks with deposits over 50 crores. On 15 April, 1980, 6 more commercial private sector banks with deposits over 200 crores were nationalised.

In July 1993, New Bank of India was merged with Punjab National Bank.
Now, there are 27 banks in the public sector viz. State Bank of India and its 7 associates, 19 commercial banks exclusive of Regional Rural Banks.

The Reserve Bank is the central banking institution of India. It was originally constituted as a shareholder's bank and started functioning as the Central Bank of India from 1st April 1935.Before 1935, the central banking functions were divided between the Central Govt. and the Imperial Bank of India.

The Reserve Bank has the sole authority to issue bank notes in India.

India adopted a decimal monetary system in 1957.

The management of note issue is the responsibility of the Reserve Bank of India, which is the central bank of the country. Coins are issued in denominations of Ten Paise, Twenty Five Paise, Fifty Paisa, Rupee One, Rupees Two and Rupees Five.

Presently notes are issued in denominations of Rupees Five, Rupees Ten, Rupees Twenty, Rupees Fifty, Rupees Hundred, Rupees Five Hundred and Rupees One Thousand. While notes of Rupee One and Rupees Two are still in circulation, these denominations have been coinised and no new notes are being issued.

This represented the currency arrangements during the transition period upto the establishment of the Indian Republic. The Monetary System remained unchanged at One Rupee consisting of 192 pies.

1 Rupee = 16 Annas
1 Anna = 4 Pice
1 Pice = 3 Pies

This series was introduced on 15th August 1950 and represented the first coinage of Republic India. The King's Portrait was replaced by the Lion Capital of the Ashoka Pillar. A corn sheaf replaced the Tiger on the one Rupee coin.

In September, 1955 that the Indian Coinage Act was amended for the country to adopt a metric system for coinage. The Act came into force with effect from 1st April, 1957. The rupee remained unchanged in value and nomenclature. It, however, was now divided into 100 'Paisa' instead of 16 Annas or 64 Pice. For public recognition, the new decimal Paisa was termed 'Naya Paisa' till 1st June, 1964 when the term 'Naya' was dropped.