look news india
45 years ago, on 15 April 1980, banks were nationalized in India on 15 April 1980. On this day, the government took six major private banks under it, making it a part of the process of bringing banks under government control. Earlier, banks were nationalized for the first time in 1969, when the then Prime Minister Indira Gandhi nationalized 14 major banks of the country. Now the question arises as to why the banks were nationalized and what effect did it affect the economic situation of the country?
What does nationalization of banks mean?
Nationalization of banks meant that private sector -owned banks were taken under the control of the government, that is, the government bought a majority stake in these banks and subjugate them. When the government has more than 50 percent stake, that bank comes under government control. In 1969, the first 14 banks and six more banks were nationalized in 1980.
Why was banks nationalized?
Nationalization of banks was necessary, because the country got independence in 1947, but banking facilities were not reaching the general public. At that time there was dominance of industrialists on banks, which did not have access to banks in villages and remote areas. Especially the farmers were not getting loans. Between 1947 and 1955, 360 small banks were submerged, which also ended the deposits of the people. Due to the rights of private companies and industrialists, banks were investing in black markets and hoarding, due to which the general public could not get banking facilities. In view of these problems, the issue of nationalization of the Reserve Bank of India was raised and the government decided to take banks under its control.
Imperial Bank becoming SBI
The Imperial Bank was established in 1955, which later came to be known as State Bank of India (SBI). In 1969, the government nationalized 14 banks and then in 1980 brought 6 more banks under government control. These banks included Andhra Bank, Corporation Bank, New Bank India Limited, Oriental Bank of Commerce, Punjab & Sindh Bank and Vijaya Bank.
Nationalization benefits
The nationalization of banks increased the access to banking services to villages, poor and farmers. After nationalization, the branches of banks started growing and in 1969, where there were only 8,322 branches in the country, now this number has exceeded 85 thousand. With this process, farmers started getting loans easily and the agricultural sector, small business, self -employment etc. got encouraged. Along with this, people also started getting services like home loan and education loans easily.
Nationalization contributed significantly to the country’s economic growth and provided banking services to billions of Indians. The move strengthened India’s financial sector and promoted development.