Nationalization
Banking · राष्ट्रीयकरण · 22 facts
Imperial Bank of India nationalized as SBI in 1955 under SBI Act
A.D. Gorwala Committee recommended nationalization of Imperial Bank
14 banks nationalized on 19 July 1969 (deposits above Rs 50 crore)
Nationalization of 14 banks happened under PM Indira Gandhi
6 more banks nationalized on 15 April 1980 (deposits above Rs 200 crore)
Total 20 banks nationalized (14 in 1969 + 6 in 1980), excluding SBI
Purpose of nationalization: social welfare, rural credit, reduce monopoly
1969 banks: Central Bank, BoI, PNB, BoB, UCO, Canara, Dena, United, Syndicate etc.
1980 banks: Andhra Bank, Corporation Bank, New Bank of India, OBC, Vijaya, Punjab & Sind
New Bank of India was merged with PNB in 1993 (ONLY nationalized bank to be merged early)
After 1980, India had 27 public sector banks (PSBs) before merger wave
Banking Regulation Act 1949 gives RBI power to regulate banking companies
SBI was the FIRST public sector bank; nationalized before the 1969 wave
SBI subsidiaries (5 associate banks) nationalized under SBI Subsidiary Banks Act 1959
Lead Bank Scheme (1969) assigned one bank to each district for development
Social Banking concept emerged after 1969 nationalization
Priority Sector Lending norms introduced after nationalization (40% target)
Nationalization helped expand bank branches from 8,000+ to 60,000+ in decades
Bank nationalization was challenged in Supreme Court (Rustom Cooper case 1970)
Indira Gandhi used ordinance route first, then passed Banking Companies Act 1970
Govt holds minimum 51% stake in all nationalized banks
IDBI Bank was nationalized in 2019 (converted from development bank to PSB)