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Progress of commercial banks after nationalization

After nationalisation, the Indian economy has seen a growth in the branch network of commercial banks. These developments have been highlighted in the following points.
  • Increase in number of branches: Increase in the number of branch offices from 8,262 in 1969 to 98,591 branches in 2012 shows a better reach to banking facilities. The population per bank office has reduced from 55,000 in 1969 to 12,500 in 2012. (see chart 2)
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  • Branches in rural and unbanked areas: After nationalisation, the number of branches in rural and unbanked areas increased from just 22% in 1969 to 37% in June 2012 (see chart 3). This aided in checking the imbalances in disbursement of banking finance in India.
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  • Deposit mobilisation: Aggregate deposits of commercial banks increased from 4,665 crore in 1969 to around 60,00,000 crore in 2012. Maharashtra leads all other states in deposit mobilisation accounting for about 23% of the aggregate deposits received by banks followed by Delhi, Uttar Pradesh, West Bengal, Karnataka, Tamil Nadu and Andhra Pradesh which together account for 67% of the aggregate deposits of banks.
  • Bank lending: The amount of bank lending has gone up from 3,399 crore in June 1969 to over and above 50,00,000 crore in Dec 2012. Also, the priority sectors like agriculture, small scale industries, etc. which received 15% of the commercial bank’s credit in 1969 received about 41% in 2012.
  • Promotion of entrepreneurship: Banks are now financing schemes which promote entrepreneurship. Integrated Rural Development Programme (IRDP), Training of Rural Youth for Self-Employment (TRYSEM), JRY (Jawahar Rozgar Yojna), NRY (Nehru Rozgar Yojana) is some of them. Also, commercial banks have started funding borrowers having genuine requirements.

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