Using your phone's internet browser
go to:  qna.rediff.com
Click and drag this link to
the Home icon in your browser.
Q.

Why were banks nationalised in India ?

Tags: india, banks
Asked by rajaram rao, 03 Dec '07 07:05 pm
  Invite a friend  |  
  Save  |  
 Earn 10 points for answering
Answer this question  Earn 10 points for answering    
4000 characters remaining  
  
    
Keep me signed inNew User? Sign up

Answers (5)

1.

WHY BANK NATIONALISATION?

The need for the nationalisation was felt mainly because 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 and the nationalisation of the largest bank, the State Bank of India, in 1955, the expansion of commercial banking had largely excluded rural areas and small-scale borrowers.



The developmental goals of financial intermediation were not being achieved other than for some favoured large industries and established business houses. Whereas industrys share in credit disbursed by commercial banks almost doubled between 1951 and 1968, from 34 per cent to 68 per cent, agriculture received less than 2 per cent of total credit. Other key areas such credit to exports and small-scale industries were also neglected.



The stated purpose of bank nationalisation was to ensure that credit allocation ...more
Answered by Prem Malhotra, 03 Dec '07 07:08 pm

 
  
Report abuse
Useful
 (1)
Not Useful
 (0)
Your vote on this answer has already been received
2.

to curtail the misuse of the funds by the private owners as they manipulted and lots of banks failed therefore in 1969 govt of india took many banks to safe gaurd the interest of investors
Answered by sandeep banga, 03 Dec '07 07:17 pm

 
  
Report abuse
Useful
 (0)
Not Useful
 (0)
Your vote on this answer has already been received
3.

The need for the nationalisation was felt mainly because 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 and the nationalisation of the largest bank, the State Bank of India, in 1955, the expansion of commercial banking had largely excluded rural areas and small-scale borrowers.



The developmental goals of financial intermediation were not being achieved other than for some favoured large industries and established business houses. Whereas industrys share in credit disbursed by commercial banks almost doubled between 1951 and 1968, from 34 per cent to 68 per cent, agriculture received less than 2 per cent of total credit. Other key areas such credit to exports and small-scale industries were also neglected.



The stated purpose of bank nationalisation was to ensure that credit allocation occur in accordance with p ...more
Answered by GOPI KUMAR, 03 Dec '07 07:08 pm

 
  
Report abuse
Useful
 (0)
Not Useful
 (0)
Your vote on this answer has already been received
4.

To regulate banking operations in the country
Answered by AMAN VOHRA, 03 Dec '07 07:06 pm

 
  
Report abuse
Useful
 (0)
Not Useful
 (0)
Your vote on this answer has already been received
5.

To troible nation preprty
Answered by sai technologies, 03 Dec '07 07:06 pm

 
  
Report abuse
Useful
 (0)
Not Useful
 (0)
Your vote on this answer has already been received

Ask a Question

Get answers from the community

600 characters remaining

Related Answer

Q.
A

He is helpless in making such statements. He is engulfed in a vicious circle and can not come out now..The crocodiles who are shedding tears for corru..more

Answered by Kanai Chakraberti