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Commercial Banking In India


At the time of Independence, India had a fairly well–developed banking system with more than 645 Banks having more than 4800 branch offices. These banks although developed but they could not conform to social needs of the society. These banks generally catered to the needs of industries and that too big ones. Other priority sectors like agriculture, small–scale industries, exports etc., were almost neglected. To overcome these deficiencies, the Government announced the nationalization of 14 major commercial banks with effect from July, 1969. The objectives of nationalization were to control the height of the economy and to meet progressively the needs of development of the economy, in conformity with national policy and objectives. Six more banks were nationalized in 1980. (Two banks were merged in 1993, so at present there are 19 nationalized banks).

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