He was born in Calcutta to a Brahman family and, after earning his B.A. in English literature in Calcutta, traveled to London in 1869 to take the examination to join the Indian Civil Service. (This examination was not offered in India until 1921.) He achieved a high score but was disqualified over a misunderstanding about his age.
When this was clarified, he received an appointment for three years, until he was dismissed for a minor rule infraction. Banerji later recalled that these early experiences demonstrated to him the essential injustice of British rule and the powerlessness of the Indian people under it.
Banerji returned to India to work as a journalist and educator, and in 1876 founded the Indian Association, the first nationalist political association in Bengal (an area now divided between northeastern India and Bangladesh).
The aim of this association was to encourage Indians of different religious backgrounds to work together, although it was never entirely successful. The Indian Association did, however, serve as the vehicle for India’s nationalist movement and attracted ambitious members of the Indian middle and upper classes (like Banerji himself) who sought greater political and economic opportunities.
In 1879 Banerji purchased a newspaper, The Bengalee, which he edited for 40 years. This paper served as a mouthpiece for the Indian Nationalist movement and had the highest circulation of any Indian weekly paper of its time.
Banerji was an effective political speaker and was twice elected president of the Indian National Congress. He advocated moderation and the achievement of reforms through the political process, and he believed the goal of British policy should be for eventual self-government for India.
He also argued that India should have a constitution similar to that of Canada and that basic civil rights such as habeas corpus should be ensured. Banerji was knighted in 1921 and accepted the post of minister of local self-government in Bengal.
His moderate political views were not always popular with the local populace, and after defeat in 1924 by a more radical Swaraj (independence party) candidate, Banerji retired from public life to write his memoirs, published in 1925 as A Nation in the Making.