Nationalisation of Banks, Reason/motto behind Nationalisation,List of Commercial Banks which were nationalised. Difference between nationalised and Public sector bank

Nationalization Of banks

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A nationalized bank is one which is owned by Government of the country means major stake or equity is held by the government. The government is responsible for the money deposited into the accounts of these banks.

1955- Imperial bank of India was formed in 1921 by amalgamating the presidency banks of Bengal, Bombay and Madras. It was nationalized in 1955 and renamed as State Bank of India.
Note: SBI is not nationalised, it is a public sector bank. Only 19 banks are nationalised.

19 July 1969- Fourteen (14) Commercial Banks were nationalized in 1969 which had total deposits of Rs 50 crore and above.  At that time Smt. Indira Gandhi was the Prime Minister Of India.

List of Banks Nationalised in 1969

Ø  Allahabad Bank

Ø  Andhra Bank

Ø  Bank of Baroda

Ø  Bank of India

Ø  Bank of Maharashtra

Ø  Canara Bank

Ø  Central Bank of India

Ø  Corporation Bank

Ø  Dena Bank

Ø  Indian Bank

Ø  Indian Overseas Bank

Ø  Oriental Bank of commerce

Ø  Punjab National Bank

Ø  Syndicate Bank

Ø  UCO Bank

Ø  Union Bank of India

Ø  United Bank of India

Ø  Vijaya Banka

Ø  Punjab and Sind Bank

April 1980- Six (6) More Commercial bank were nationalized in 1980 which had total deposits of Rs 200 crore and above.

1990- Laxmi National bank merged to Punjab national Bank.

The nationalisation of commercial banks took place with an aim to achieve following major objectives/Motto behind nationalization of banks:

Ø  Priority Sector Lending: To fulfill the requirements of the agricultural sector and other micro, small scale sector etc.

Ø  Expansion of Banking: To expand the banking across the country and correct the urban bias.

Ø  To mobilize saving of large mass of banks as People have more faith on Public sector bank which helps in capital formation.

Ø  Social Welfare: To direct the fund to all the sectors including Small Scale sector, Agriculture, etc.

Ø  Controlling Private Monopolies: As bank in private sector mostly provided credit to a small class of high profile customers and those industries in which banks shareholders had their interests.

Difference between Nationalised and Public sector Bank

SBI is Not a Nationalized bank. It is a Public Sector Bank. SBI draws its power from State Bank of India Act, 1955. Nationalized banks are the banks which were nationalized in two phases – in 1969 and 1980. In 1990 Laxmi National bank merged to Punjab national Bank which reduced the number of nationalized bank to 19. It means all nationalized bank are Public sector bank but not vice versa. SBI and its associates, are public sector but not nationalized.

Click Here to read from RBI website (Read Point D and E). Clarification of the Difference

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