Nationalization of Indian Banks
Nationalization & Privatization of Indian Banks
Published on: Mar 3, 2016
Transcripts - Nationalization of Indian Banks
Presented By –
Roll No. 1
WHAT IS NATIONALIZATION?
Nationalization is the process of taking a private
industry or private assets into public ownership by a
national government or state.
14 banks were nationalized in 1969.
6 banks were nationalized in 1980.
NEED FOR NATIONALIZATION
Private commercial banks were not fulfilling the social
and developmental goals of banking which are so
essential for any industrialising country.
Despite the enactment of the Banking Regulation Act
in 1949, the expansion of commercial banking had
largely excluded rural areas and small-scale borrowers.
OBJECTIVES OF NATIONALISATION
• Improve Economy’s Condition
•To fulfill Social Objectives
• Controlling Private Monopolies
• Expansion of Banking
• Reducing Regional Imbalance
• Priority Sector Lending
• Developing Banking Habits
Mrs. Indira Gandhi
State Bank of India (SBI)
i. State Bank of Hyderabad
ii. State Bank of Indore
iii. State Bank of Saurashtra
iv. State Bank of Mysore
v. State Bank of Bikaner
and Jaipur (SBBJ)
vi. State Bank of Patiala
vii. State Bank of Travancore
Central Bank of India
Bank of Maharashtra
Punjab National Bank
Indian Overseas Bank
Bank of Baroda
Union Bank of India
Bank of India
Bhartiya Mahila Bank
Oriental Bank of Commerce
Punjab & Sind Bank
United Bank of India
EFFECTS OF NATIONALIZATION
Increase in number of branches
More concentration of banks in
rural, unbanked and under
Increase in deposits & lending
Priority sector lending was
Public sector bank branches rose to approximately
800% in deposits and advances took a huge jump by
Banks with Government ownership gave the public
implicit faith and immense confidence about the
sustainability of these institutions.
After 1991 reforms and technological up gradation of
the banks, the situation is such that the country is
flooded with foreign banks and their ATM stations.
Efforts are being put to give a satisfactory service to
Phone banking and net banking is introduced.
LIMITATIONS OF NATIONALIZATION
Inadequate Banking Facilities
Lowered Efficiency and Profits
Political and Administrative Inference
What is Denationalization?
Denationalization is the privatization of an industry,
transferring from public to private ownership.
After LPG process in the year 1991, privatization was
boosted in banking industry too.
OBJECTIVES OF PRIVATE BANKS
Better standard of service
Improvement in performance
Promote healthy competition
Development of capital market
ADVANTAGES OF PRIVATE BANKS
Improvement in performance
Better standard of living
Decrease in expenses
Increase in deposits
Decrease in default loans
DISADVANTAGES OF PRIVATE
Misuse of loans
Neglecting small industries
Neglecting agriculture sector
Lack of co-operation
Concentration of wealth in few hands
Advances to relatives and employees
PRIVATE BANKS IN INDIA
Catholic Syrian Bank
City Union Bank
Development Credit Bank
ING Vysya Bank
Karur Vysya Bank
Kotak Mahindra Bank
Lakshmi Vilas Bank
South Indian Bank
UP Agro Corporation Bank
The pace of development for the Indian banking
industry has been tremendous over the past decade.
As the world reels from the global financial meltdown,
India’s banking sector has been one of the very few to
actually maintain resilience while continuing to
provide growth opportunities, a feat unlikely to be
matched by other developed markets around the