Important events related to Nationalization of Commercial Banks

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.
 
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. 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
 
6. The government on August 2019, unveiled a mega plan to merge 10 public sector banks into four as part of plans to create fewer and stronger global-sized lenders as it looks to boost economic growth from a six-year low.
Post the mega merger, here are the six PSU banks that will remain independent: Indian Overseas Bank, Uco Bank, Bank of Maharashtra and Punjab and Sind Bank, which have strong regional focus, will continue as separate entities.
Bank of India and Central Bank of India will also continue to operate separately as before.

Oriental Bank of Commerce and United Bank merger will merge into Punjab National Bank to create a bank with 17.95 lakh crore business and 11,437 branches.

The merger of Syndicate Bank with Canara Bank will create the fourth largest public sector bank with 15.20 lakh crore business and a branch network of 10,324.

Andhra Bank and Corporation Bank’s merger with Union Bank of India will create India’s fifth largest public sector bank with 14.59 lakh crore business and 9,609 branches.

The merger of Allahabad Bank with Indian Bank will create the seventh largest public sector bank with 8.08 lakh crore.

After the mergers, the country will have 12 public sector banks.
 

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