{"id":119669,"date":"2021-07-19T20:02:16","date_gmt":"2021-07-19T14:32:16","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=119669"},"modified":"2021-07-20T16:43:52","modified_gmt":"2021-07-20T11:13:52","slug":"bank-nationalisation-52-years-and-ticking","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/bank-nationalisation-52-years-and-ticking\/","title":{"rendered":"Bank Nationalisation: 52 years and ticking"},"content":{"rendered":"<p><strong>Source:<\/strong> <a href=\"https:\/\/www.business-standard.com\/article\/opinion\/bank-nationalisation-52-years-and-ticking-121071800755_1.html\">Business Standard<\/a><\/p>\n<p><strong>Relevance<\/strong> &#8211; The government has cleared its intention to privatize the public banks. This article highlights some aspects of bank nationalization.<\/p>\n<p><strong>Synopsis<\/strong>: Nationalization has served its purpose. It\u2019s time to move forward with the retention of majority ownership of the government in a few banks to serve people.<\/p>\n<h5><strong>History of Bank Nationalization in India<\/strong>:<\/h5>\n<ul>\n<li>14 banks with deposits of at least Rs 50 crore each were nationalised on the midnight of July 19, 1969, by Indira Gandhi.<\/li>\n<li>Incidentally, this was not the first attempt to nationalise banks. An ordinance had been drafted in 1963 as well, seemingly under great political pressure to nationalise five major banks.<\/li>\n<li>A second round of nationalisation of six more commercial banks with deposits of more than Rs 200 crore was done in 1980.<\/li>\n<\/ul>\n<h5><strong>Reasons behind bank nationalisation<\/strong><\/h5>\n<ul>\n<li><strong>Mis-governance<\/strong>: Post-World War II, many banks collapsed as they had been financing speculative activities.<\/li>\n<li><strong>Non inclusive<\/strong>: over 300 banks during that time were under the regulation of RBI as many of them were reluctant to support industry and agriculture and only gave trade finance.<\/li>\n<li><strong>Bank Failure<\/strong>: In 1960, Palai Central Bank and Lakshmi Commercial Bank collapsed, the RBI launched a massive consolidation drive, bringing the number of banks from 328 in 1960 to 94 by 1965.<\/li>\n<\/ul>\n<h5><strong>Had the objective of Bank Nationalisation met?<\/strong><\/h5>\n<ul>\n<li>Nationalisation of banks has served its purpose by taking banking to the hinterland and bringing a large part of the population into its fold.<\/li>\n<li>Since then, the banking industry has grown.<\/li>\n<li>In June 1969, there were 73 commercial banks; now there are 94, including small finance banks and payments banks but excluding regional rural banks and local area banks.<\/li>\n<li>The number of bank branches has grown from 8,262 to 158,373.<\/li>\n<li>One branch now covers roughly 9,500 people against 64,000 in 1969.<\/li>\n<li>In June 1969, the deposit portfolio of banks was Rs 4,646 crore, by June 2021, the deposit portfolio has grown close to Rs 153 trillion.<\/li>\n<\/ul>\n<h5><strong>Moving Ahead: Privatising Public sector banks<\/strong><\/h5>\n<ul>\n<li>Due to rising NPA\u2019s and faced with the issue of Political intervention, PSB\u2019s are in a bad state of financial health.<\/li>\n<li>Hence, the current government wants to Privatise few of the PSB\u2019s to improve the banking sector in India.<\/li>\n<li>In February 2021 Union Budget, for the first time, spoke about privatising two such banks. Even before that, the government had committed to privatise IDBI Bank Ltd.<\/li>\n<li>In the run-up to the privatisation, the public sector banking industry had gone through a major phase of consolidation. The number of PSB\u2019s has come down from 27 to 12 in three years, between 2017 and 2020.<\/li>\n<li>Recently, Finance Secretary T V Somanathan said the government would \u201ceventually\u201d privatise most of the PSBs and keep its presence to a bare minimum.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source: Business Standard Relevance &#8211; The government has cleared its intention to privatize the public banks. This article highlights some aspects of bank nationalization. Synopsis: Nationalization has served its purpose. It\u2019s time to move forward with the retention of majority ownership of the government in a few banks to serve people. History of Bank Nationalization&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/bank-nationalisation-52-years-and-ticking\/\">Continue reading <span class=\"screen-reader-text\">Bank Nationalisation: 52 years and ticking<\/span><\/a><\/p>\n","protected":false},"author":10316,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[8489,8490,221,216],"class_list":["post-119669","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-bank-nationalisation-52-years-and-ticking","tag-bank-nationalization","tag-economy","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1701889780},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/119669","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10316"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=119669"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/119669\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=119669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=119669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=119669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}