During 1969, the Indian Government Nationalized into 14 Major Private Banks, and among them, one of the big banks was Bank of India. And In 1980, More 6 Private banks were nationalized. The term of Commercial Banks Refers to both scheduled and Non- Scheduled Commercial banks which are regulated under the Banking Regulation Act, 1949.
The banking Sector Reforms Started immediately after Independence. These reforms were basically aimed at improving the confidence Level of the Public because in those days most of the Banks were not trusted by the majority of the people. Instead of the deposits with the postal department which were considered rather safe and also the Banking and Financial Sector reforms are not static events but also Continuous Processes which is happening even today and will keep continuing. Nationalization of Banks, Consolidation, Diversification, and Liberalization of the banking industry in the year of 1980s and 1990s were part of this Ongoing Process. The first major step was Nationalization of the Imperial Bank of India in 1955 via State Bank of India Act.
There were about 14 Banks Which are Nationalized in 1969, they are:-
1. Central Bank of India | 2. Bank of Maharastra |
3. Dena Bank | 4. Punjab National bank |
5. Syndicate Bank | 6. Canara Bank |
7. Indian Bank | 8. Indian Overseas Bank |
9. Bank of Baroda | 10. Union Bank |
11. Allahabad Bank | 12. United Bank of India |
13. UCO Bank | 14. Bank of India. |
The above-mentioned Banks were followed by the Second Phase of nationalization in 1980, where the Government of India. The private banks at that time were allowed to function side by side with nationalized banks and the foreign banks were allowed to work under strict regulation.
Impact of Nationalization of Banks:-
Nationalization of the Banks brought the public confidence in the banking system of India. After the two major phases of nationalization in India, 80% of the banking sector came under the public sector/government ownership. After the nationalization of banks, the branches of the public sector banks in India rose to approximately 800 percent in deposits, and advances took a huge jump by 11,000 percent. Government ownership gave the public sector banks.
