History of Banking in India : Phase-II
The Second Phase of banking in India starts from 1935 when Reserve Bank of India was established. Between the period of 1911-1948, there were more than 1000 banks in India, almost all small banks. The Reserve Bank of India was constituted in 1934 as an apex Bank, however without major government ownership. Immediately after the independence, the Government of India came up with the Banking Companies Act 1949. This act was later changed to Banking Regulation (Amendment) Act 1949. Further, the Banking Regulation (Amendment) Act of 1965 gave extensive powers to the Reserve Bank of India and via this act, the Reserve Bank of India was made the Central Banking Authority.
The banking sector reforms started immediately after the independence. These reforms were basically aimed at improving the confidence level of the public because in those days, most banks were not trusted by the majority of the people. Instead, the deposits with the Postal department were considered rather safe.
The first major step was Nationalization of the Imperial Bank of India in 1955 via State Bank of India Act. State Bank of India was made to act as the principal agent of RBI and handle banking transactions of the Union and State Governments.
After that, in a major process of nationalization, seven subsidiaries of the State Bank of India were nationalized via the State Bank of India (Subsidiary Banks) Act, 1959. In 1969, fourteen major private commercial banks were nationalized. These 14 banks Nationalized in 1969 are as follows:
[table id=70 /]The above was followed by a second phase of nationalization in 1980, when Government of India acquired the ownership of 6 more banks, thus bringing the total number of Nationalised Banks to 20. 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.
After the two major phases of nationalization in India, the 80% of the banking sector came under the public sector / government ownership. After the nationalisation of banks, the branches of the public sector banks in India rose to approximately 800 per cent in deposits, and advances took a huge jump by 11,000 per cent. Government ownership gave the public implicit faith and immense confidence in the sustainability of public sector banks.
suresh
April 21, 2011 at 10:23 amThis is a test comment
Tribhuvan kumar
May 3, 2014 at 10:42 amSir, how much nationalise bank this time
Anjaneya
June 7, 2011 at 5:25 pmSir, I believe on April 15,1980 Six more banks were nationalised (instead of 7 which you have mentioned) and the total number of nationalised banks became 20. In 1993 New bank of India was merged with Punjab National Bank and thus the number of nationalised banks came down to 19.
Anjaneya
June 25, 2011 at 12:10 amThank you sir for updating the information. You are doing a great job for us. It is really commendable.
mayank
July 8, 2011 at 11:30 amfirst of all thank u very much . ur information give me a great knowledge . but in the above history there is some doubt from my side .the doubt is that SBI was not nationlized in 1955 from that time SBI is working under RBI . my economic’s sar said that in 1955 IMPERIAL BANK OF INDIA was only change in SBI . it was not nationlized . plz clear this doubt as soon as possiable
seema
July 14, 2011 at 10:10 pmthanks for the worthy knowledge……
Niketa
August 1, 2011 at 12:50 amThanks for providing us amazing & incredible knowledge of Banking sector
ajay
August 17, 2011 at 10:37 pmgreat !!!
best for ga
nisha
October 4, 2011 at 6:09 pmthank u sir
sarna krish
November 23, 2011 at 3:46 pmkudos !!!.Gud job.Pls try educating masses.U r capable of doing that.
swati
January 25, 2012 at 4:57 pmthe best site for all the informations related to bank.
sudhir kumar , saharsa bihar
January 31, 2012 at 8:55 pmthanku sir
its very very important information for us which helps to increase banking awernass for banking examination
nisha saini
March 15, 2012 at 1:56 pmsir my GA sir said that SBI is not a nationalized bank…. In 1955 it named SBI from IMPERIAL BANK…. please clear my doubt..
Thank u..
GKToday
March 19, 2012 at 1:58 pmAsk your sir to go back to fundamentals. Imperial Bank of India was nationalised (under the SBI Act of 1955)
shailendra sharma
June 14, 2014 at 7:57 pmSir i am agree with you that Imperial Bank Of India was nationalized under the SBI act of 1955 but SBI and IDBI is not a nationalized bank both are public sector bank.
Shivam Raghav
March 16, 2012 at 12:48 amHello Sir…..
All the content is precious but I have heard that SBI doesn’t a nationalized bank but here it is showing as a nationalized bank.
Pls make me correct.
saugata
March 22, 2012 at 7:28 pmGKToday is absolutely right.
SBI is nationalized in 1955. In 1980 there was 21 nationalized bank, later New Bank of India merged with PNB. Now no. of nationalized banks are 20.
It is very easy to remember:
19 nationalized bank is under IBPS. SBI is not under IBPS.
srinivas
February 15, 2013 at 9:03 amThank you saugata sir for clearing
Jitendra Sharma
February 25, 2013 at 10:18 pmGud job… please mention about Tax nd Influation…
balu
March 5, 2013 at 12:41 pmthanku so much… u guys r doing gr8t job ….
u cant even imagine how much is this site is useful for those who r prepareing for competative exams..and cant afford much money for training centres…thanku and god bless u…
selva
July 3, 2013 at 9:15 pmVery useful news I liked…
sujit kumar
July 22, 2013 at 3:29 pmthank u sir
Falguni
August 1, 2013 at 3:56 pmthanx its really learning.
kaplish
August 5, 2013 at 5:36 pmi am in confusion.how many nationalized banks are there.whether 19 or 21since ibps in po3 has notified 21 banks and some websites are saying there are 21 others are saying 19..plz reply asap
RAMESH
February 7, 2014 at 1:40 pm19 NATIONALISED BANK.1 IDBI.1 ECGC..TOTALLED TO 21
Ranjit
July 10, 2014 at 9:35 pmsir, when I visit ur site I saw written there sbi is a nationalized bank. then i goes to sbi Wikipedia i didn’t saw anywhere write sbi is a nationalized bank. it just change his name from Imperial Bank of India TO SBI
mitu
August 1, 2014 at 10:00 amthank u very much sir for this information.
athira.p
August 3, 2014 at 12:56 pmThankyou for this valuable information
divya rastogi
December 7, 2014 at 12:41 pmWhen IDBI and Bhartiya mahila bank were nationalized?
Rply soon
sakshi singh thakur
December 21, 2014 at 3:19 pmThanks for providing knowledge.
vikashg
May 2, 2015 at 12:14 amComment when commercial bank nationalized for first time
anoop
July 9, 2015 at 6:27 pmOn what basis banks were nationalised in India in 1969?
Brijesh Nair
September 1, 2015 at 4:27 pmSir,
I need a Clarification, It has been said that the nationalization of Bank Happened after adequately compensating the promoters . Could you please let me know how they were compensated??