When did the first nationalisation of banks take place in India?

Correct option is C

The correct answer is (c) 1949

Explanation:

• The first nationalization of banks in India took place in 1949 with the nationalization of the Reserve Bank of India (RBI).
• The Banking Regulation Act, 1949, was enacted to regulate banking activities in India.
• However, the major nationalization of banks happened later in 1969, when 14 private banks were nationalized by the Government of India under Prime Minister Indira Gandhi.

Information Booster:

Brief History of Nationalization in India

• 1955: The Imperial Bank of India was nationalized and transformed into the State Bank of India (SBI) to provide extensive banking facilities, especially in rural and semi-urban areas. SBI was designated as the principal agent of RBI to handle banking transactions for the Union and State governments.
• 19th July 1969: The first major nationalization of banks took place, bringing 14 major commercial banks under government control.
• 1980: The second phase of bank nationalization was implemented, adding six more banks to government ownership.
• This nationalization move resulted in 80% of the banking sector in India being controlled by the government, significantly increasing public sector influence in banking operations.

Objectives of Nationalization:

• To improve financial inclusion.
• To ensure government control over the banking sector.
• To support agriculture, small industries, and rural development.

Currently, there are 12 nationalised banks in the country- State Bank of India, Bank of Baroda, Punjab National Bank, Bank of India, Union Bank of India, Canara Bank, Bank of Maharashtra, Central Bank of India, Indian Overseas bank, Indian Bank, UCO Bank, Punjab and Sind Bank