Syndicate Bank was established in 1925 in the princely state of Manipal, Udupi, Mysore. It was founded by Upendra Anant Pai, T.M.A. Pai and Vamana Srinivas Kudva. Syndicate Bank was one of the oldest and major commercial banks in India. At the time of its inception, the bank was known as Canara Industrial & Banking Syndicate Limited. It is a wholly owned subsidiary of Canara Bank. The bank was nationalized by the Government of India on 19 July 1969 along with 13 major commercial banks of India. The headquarter of the bank was in the city of Manipal University, India. On 1 April 2020, the bank was merged with Canara Bank.
The promoters came from a lower-middle class background and aimed to improve the socioeconomic status of the area. It was the only Indian bank headquartered in rural areas. The bank provided employment opportunities to the educated members of the local community. Its initial paid-up capital was ₹8,000. This was in contrast to other banks that financed trade and industries mainly in urban areas. Hence as a new bank, Syndicate Bank decided to take advantage of the untapped small and medium enterprise and agriculture sector.
In 1928, Syndicate Bank launched the pygmy deposit scheme. Under this scheme, banking agents visit the doorsteps of farmers and shopkeepers at stipulated intervals to collect the deposits. By 1960, 21% of the bank’s net deposits came from pygmy deposits. Its unconventional practices were criticized by the Reserve Bank of India (RBI).
In 1969, it was nationalized along with 13 other major banks. In December 1969, it had 350 branches, by December 1974, it had 700 branches.
In 1975, it established India’s first Regional Rural Bank (RRB), Pratham Bank in Moradabad, Uttar Pradesh.] In 1976, Syndicate Bank sponsored the establishment of Malaprabha Gramin Bank in Dharwad, Karnataka. In 1983, Bijapur Gramin Bank was sponsored by Syndicate Bank, which is headquartered in Bijapur. In 1984, it also established Netravathi Gramin Bank in Mangalore and Varada Gramin Bank in Kumta. As of December 1986, it had 1456 branches.
