Ammembal Subba Rao Pai, a philanthropist,established the Canara Hindu Permanent Fund in Mangalore,India, on July 1, 1906. The bank changed its name to Canara Bank Limited in 1910 when it was incorporated.The first acquisition of Banco Canara took place in 1961 when it acquired the Bank of Kerala. The bank of Kerala had been founded in September of 1944 and at the moment of its acquisition the 20 of May of 1961 had three branches. The second bank that Canara Bank acquired was Seasia Midland Bank (Alleppey), which had been established on July 26, 1930 and had seven branches at the time of its acquisition.
In 1958, the Reserve Bank of India had ordered Canara Bank to acquire G. Raghumathmul Bank in Hyderabad. This bank had been established in 1870 and had become a joint-stock company in 1925. At the time of acquisition the Bank G. Raghumathmul had five branches. The merger came into force in 1961. Later, in 1961, Canara Bank acquired Trivandrum Permanent Bank. The permanent bank of Trivandrum was founded on February 7, 1899 and had 14 branches at the time of the merger.
Then, Canara Bank acquired four banks in 1963: Sree Poornathrayeesa Vilasam Bank, Thrippunithura Bank, Arnad Bank, Tiruchirapalli Bank, Cochin Commercial Bank, Cochin Bank and Pandyan Bank, Madurai. Sree Poornathrayeesa Vilasam Bank had been established on 21 February 1923 and at the time of its acquisition had 14 branches. Arnad Bank had been established on 23 December 1942 and at the time of its acquisition there was only one branch. The Commercial Bank of Cochin was established on January 3, 1936 and at the time of its acquisition had 13 branches. The Government of India nationalized Canara Bank along with 13 other major commercial banks of India on July 19, 1969. In 1976, Canara Bank Inaugurated its 1000th branch. In 1985, Canara Bank acquired Lakshmi Commercial Bank in a ransom. This brought to the Bank of Canara about 230 branches in the north of India.
In 1996, Canara Bank became the first Indian bank to obtain ISO certification for "Total Branch Banking" for its Seshadripuram branch in Bangalore. Canara Bank has stopped opting for ISO certification of branches.