• 1964: The Bank took over the assets and liabilities of the Chitradurga Bank (also known as Chitladurg Bank), which was established in 1868 in Mysore State and was the oldest bank in Mysore.
• 1966: The Bank took over the assets and liabilities of the Bank of Karnataka, in Hubli, which had been established in 1946 and which had opened one branch in Belgaum in 1947.

At some earlier point the bank also acquired the Sringeri Sharada Bank.

In the year 2000, Karnataka Bank signed a memorandum of understanding with Infosys Technologies to develop a core-banking solution called FINACLE. Over 221 branches were networked up to March 31, 2004. ^[12] The main motto of this programme is “Anytime/Anywhere banking”. ^[12] In 2002, the bank concluded a pact with Corporation Bank for sharing its ATMs. ^[11] A year later, the bank introduced the Moneyplant card that allows customers to withdraw money from any of their Karnataka bank accounts.In September 2003, the bank shifted its head office from Kodialbail to Kankanady.

The state of Karnataka, particularly the region comprising the coastal districts of Dakshina Kannada and Udupi is called as the cradle of banking in India.This is because seven of the country’s leading banks, Canara Bank, Syndicate Bank, Corporation Bank,Vijaya Bank,Karnataka Bank, Vysya Bank and the State Bank of Mysore originated from this state.The first five in the above list of banks were established in the districts of Udupi and Dakshina Kannada. These districts have one among the best distribution of banks in India – a branch for every 500 persons.Between 1880 and 1935, 22 banks were established in coastal Karnataka, nine of them in the city of Mangalore.

The origin of banking in Karnataka’s coastal region can be traced to the year 1868 when the Presidency Bank of Madras opened a branch to cater to the needs of British companies involved in exporting plantation produce. In the year 1912, the Indian Co-operative Societies Act in 1912 further energised the financial sector in this region leading to the establishment of a lot of co-operative societies. The freedom movement of India also played a crucial role as can be seen in the establishment of Karnataka Bank which was created as an offshoot of the swadeshi movement of 1905. These banks were earlier created to address the main sector in the economy i.e. agriculture but later they diversified to address other economical sectors as well.

The Indian Government’s notification of nationalisation of banks in the year 1969 and 1980, resulted in lot of these banks being nationalised with the Indian Government now owning some amount of control over these banks. As of today, State Bank of Mysore, Canara Bank, Vijaya Bank and Vysya Bank have their headquarters in Bangalore, Corporation Bank and Karnataka Bank are headquartered in Mangalore while Syndicate Bank is headquartered in manipal. The entry of the private sector into the banking sector with aggressive marketing has led these banks to rethink some of their strategies. Earlier, banking was the main activity that was undertaken by these banks but due to the competition, they have been forced to diversify into other areas like isurance equity and mutual funds.They have also been forced to upgrade their technology and introduce services like ATMs and online-banking transactions.

As of March 2002, Karnataka had 4767 branches of different banks servicing the people of the state. The number of people served by each branch was 11,000 which is lesser than the national average of 16,000, thereby indicating better penetration of banking in the state