Commercial banking in India
The Indian banking system, at the time of its attaining independence, had a well developed mechanism. It had 645 banks with more than 4,800 branch offices. However, the role of these banks did not extend to meet the societiesâ€™ social needs. While these banks could cater to the requirements of the big industries, the desirable sectors like agriculture and small scale industries were often neglected. Thus, the need was felt to nationalise banks to meet the aim of overall development of the economy and 14 banks were nationalised in 1969 and 6 more banks were nationalised in 1980. Two banks were merged in 1993. Thus, at present, there are 19 nationalised banks.
Note: Government taking over the ownership of a private company is known as nationalisation.