What are the objectives of Nationalization of Banks?

Apr 27, 2015, 17:29 IST

Important banking qna for banking aspirants, which is helpful in banking exam.

Nationalization of Banks

  • First bank to be nationalized was RBI on 1 January 1949.
  • Nationalization of Imperial Bank of India and its conversion into State Bank of India in July 1955.
  • Conversion of 8 major states associated banks into subsidiary banks in 1959.
  • Nationalization of 14 other Indian Scheduled banks in July 1969.
  • Nationalization of 6 more banks in April 1980.
  • Indian Bank merged into Punjab National Bank in 1955
  • At present, there are 27 commercial banks in public sector. Out of these, 19 banks are nationalized.
  • There are 297 scheduled banks (including foreign banks) and one non scheduled bank at the end of December 2000.
  • Out of 297 scheduled banks, 223 banks are in public sector and accounts for about 82% of the total deposits of scheduled banks.

Objectives of Nationalization

  • To eliminate concentration of economic power in few hands
  • To diverse the flow of bank credit towards priority sector consisting of agriculture and and allied activities, small scale industries and small businesses.
  • To foster a new class of entrepreneur so as to create, sustain and accelerate economic growth.
  • To professionalize bank managements.
  • To impart adequate training as also reasonable terms of service to bank staff
  • To extend banking facilities to unbanked rural areas.

List of Nationalized Banks in India

Nationalized Banks / Public-sector banks

  • Allahabad Bank
  • Andhra Bank
  • Bank of Baroda
  • Bank of India
  • Bank of Maharashtra
  • Canara Bank
  • Central Bank of India
  • Corporation Bank
  • Indian Bank
  • Indian Overseas Bank
  • Oriental Bank of Commerce
  • Punjab National Bank
  • Punjab & Sind Bank
  • Syndicate Bank
  • UCO Bank
  • Union Bank of India
  • United Bank of India
  • Vijaya Bank
  • IDBI Bank
  • Dena Bank
  • ECGC
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