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Bank Nationalization in India

07-NOV-2014 14:08

    During the colonial era numerous Indian banks were instituted either by wealthy individuals or by the Presley States. The major aim of most of the banks was to accommodate financial needs of industry and trade in that locality. During this time, the banking services became the opportunity of big business firms & wealthy individuals. Masses were denied banking services and easy credit.

    In India, Nationalization of banks by then Indian Prime Minister, Indira Gandhi wrote a new chapter in the history of Indian Banking. In India, the nationalized banks were obligated to focus on agricultural and rural sectors as a part of their social responsibility. Their resources were used to authorize farmers & agricultural laborers so as to free them from the clutches of money lenders.

    In India, Nationalization of banks was done in 2 phases. The initial phase of nationalization commenced in the year 1955 when the former Imperial Bank of India became the State Bank of India with the Act of parliament. During the year 1959, 7 subsidiaries were nationalized & connected with SBI one by one. This heralded a new beginning in the banking system of India.

    The second phase of nationalization started in the year 1969 with the nationalization of 14 main commercial banks in India. In the year 1980, six more commercial banks were nationalized & became public sector banks. Subsequently, the Public Sector Undertaking banks prolonged their reach & grew in leaps & bounds. In India, the nationalized banks expanded their branches & stretched their activities across the nation. The Public Sector banks launched new programs and schemes to cater all sections of the society. Therefore, nationalization of Banks in India helped the masses to avail banking services at reasonable cost.

    Chronology of Nationalization of Banks

    • 1955 – SBI nationalized.

    • 1959 – Seven subsidiaries nationalized & associated with State Bank of India

    1. State Bank of Bikaner and Jaipur
    2. State Bank of Hyderabad
    3. State Bank of Indore
    4. State Bank of Mysore
    5. State Bank of Patiala
    6. State Bank of Saurashtra
    7. State Bank of Travancore

    • 1969 – Fourteen major commercial Banks nationalized on July 19th, 1969.

    1. Allahabad Bank
    2. Bank of Baroda
    3. Bank of India
    4. Bank of Maharashtra
    5. Canara Bank
    6. Central Bank of India
    7. Dena Bank
    8. Indian Bank
    9. Indian Overseas Bank
    10. Punjab National Bank
    11. Syndicate Bank
    12. UCO Bank
    13. Union Bank of India
    14. United Bank of India

    • 1980 – Six more commercial Banks nationalized.

    1. Andhra Bank
    2. Corporation Bank
    3. New Bank of India
    4. Oriental Bank of Commerce
    5. Punjab & Sindh Bank
    6. Vijaya Bank

    Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank

    Source: http://pnbsu.com/

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