Impact of nationalized banks in India on the economy
Nationalised banks in India are those banks which were initially private commercial banks but later acquired by the Indian government. 14 private banks nationalized during the Indira Gandhi regime by passing an ordinance on 19th July 1969. July 19 also celebrated as Bank nationalization day in the country. In the year 1980, 6 more banks nationalized by the Indian Government. It would be interesting to note that SBI is a public sector bank but not a nationalized bank. SBI was a state-owned bank since its inception. Currently, there are 21 nationalized banks in India till date & approved by Reserve Bank of India.
Why was Bank nationalization so necessary?
- Private commercial banks nationalized so that vital sectors of the economy such as agriculture, small-scale industries and the weaker sections of the society get the much-needed capital resources for their economic growth and development.
- At that time private commercial banks were running a monopoly and granting loans only to a few large business houses which included their friends and well-wishers. Nationalised banks broke this monopoly.
- The Nationalised Banks in India took the banking activities to remote parts of the country through its expansion programmes.
- Nationalized banks in India bridged the gap between prosperous and needy regions in the country by giving special importance to the rural areas.
- Nationalized banks in India supplied the much-needed credit facilities to farmers and local entrepreneurs to revive the rural economy. These steps followed under the government policy of priority sector lending.
- 70% of the Indian population living in rural areas suffered under the clutches of usurious money lenders. Government banks in India connected the rural population to the mainstream Banking structure in the country.
List of Nationalised Banks in India
|Sl. No.||List Nationalised Banks|
|3||Bank of Baroda|
|4||Bank of India|
|5||Bank of Maharashtra|
|7||Central Bank of India|
|11||Indian Overseas Bank|
|13||Oriental Bank of Commerce|
|14||Punjab and Sind Bank|
|15||Punjab National Bank|
|16||State Bank of India|
|19||Union Bank of India|
|20||United Bank of India|
Reference Link: https://en.wikipedia.org/wiki/Public_sector_banks_in_India