Important events related to Nationalization of Commercial Banks
The process of nationalization of banks began when the Reserve Bank of India was nationalized on 1 January, 1949 with the passing of the Reserve Bank (Transfer of Public Ownership) Act, 1948.
The first step towards the nationalisation of commercial banks was taken with the nationalisation of the Imperial Bank of India as the State Bank of India on 1 July, 1955. The second step was taken when 7 State-associated banks were nationalised as subsidiaries of the State Bank of India in 1959.
The third major step was the nationalisation of 14 major commercial banks with deposits exceeding Rs. 50 crores each on 19 July 1969. They are: Allahabad Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Dena Bank, Indian Bank, Indian Overseas Bank, Punjab National Bank, Syndicate Bank, Union Bank of India, United Bank of India, and United Commercial Bank.
The last step was the nationalisation of 6 more commercial banks on 15 April 1980. They were: Andhra Bank, Corporation Bank, New Bank of India, Oriental Bank of Commerce, Punjab and Sind Bank, and Vijaya Bank.
1. Nationalized Banks were 21 in number in 1980.
2. In 1993 – PNB acquired New Bank of India, which the Government of India had nationalized in 1980. This changed the total count of nationalized banks to 20.
3. In 2004, RBI in its circular mentioned that IDBI may be considered as a Government-owned bank, “Other public sector banks”. This took the count of nationalized PSB as 21 again.
4. Again the RBI, in March 2019, said that IDBI Bank has been categorized as a private sector bank for regulatory purposes with effect from January 21, 2019, which took the count of nationalized PSB’s as 20.
This follows Life Insurance Corporation of India (LIC) acquiring 51% of the total paid-up equity share capital of the bank in 2019.
5. The merger of Dena Bank and Vijaya Bank with Bank of Baroda (effective from 1st April 2019). With this, the number of Nationalized banks are 18 again now.
6. Bank of Baroda (BoB) has become India’s third largest bank after its merger with Dena Bank and Vijaya Bank (in April 2019) after State Bank of India (SBI) and HDFC Bank.
7. India’s first-ever three-way consolidation of banks in India, with the amalgamated entity emerging as the country’s second largest public sector bank