Bank Service in India/Nationalisation of Bank
[Points: Introduction - old system -control by the big business-main reason behind nationalization-socialistic ideas - urban development - credit facilities - a new approach - conclusion.]
Banks are the backbones of any civilized nation. Banking activity is the true index of commercial and industrial progress of a country. It supplies blood in the financial activities of the nation by mobilizing savings and creating credit facilities for the economic development of the country.
Earlier Indian banking institutions were in the hands of big businessmen and monopoly houses. They used the finances of these banks for their own benefit. These banks, thus, were looking after the interests of big business houses overlooking the needs of the weaker sections of the society. The interest of the farmers, retail traders, rural artisans, transport operators and self-employed persons were generally overlooked. Even small industries did not get adequate attention. Moreover, the sphere of activities of these banks was mostly confined to cities and big towns only. The rural areas were deprived of the banking facilities. This was a major factor which stood on the way to proper implementation of the socialistic ideals of the government. Realising this, Prime Minister Indira Gandhi took the extreme step on 19th July 1969. She nationalized fourteen major banks at that time. Afterwards, some more banks were nationalised. The major banking institutions are now directly under the control of the Government. This step has been taken to ensure that mobilisation of surplus money available in the country and its utilisation is done in a proper way to help the growth of the nation's economy and to encourage the vital sectors. Previously loans and sanctions were mostly reserved only for the big houses. Now common man has come under focus. The bank credit now feeds the sick cottage industries, cooperatives and the poorer sections like the farmers, traders and small businessmen - the backbone of a socialistic government, neglected till yesterday.
Following nationalization, there has been a major drift in banking activities from urban to rural areas. More than half of the new branches opened after nationalization are located in rural areas to serve the banking needs of the rural community. The weaker sections of the society would no longer suffer from non-availability of finances for productive purposes. The small borrowers in different fields of activities such as rickshaw pullers, shopkeepers, small artisans, educated unemployed, farmers would now get liberal credit facilities to start new ventures which are socially useful and commercially viable. Banks are also playing an important role in mobilising small savings and creating big capital for the nation. The different banking institutions now come forward every day with new schemes of deposits to ensure a better future for their customers. Old age pension, education of children, the marriage of a daughter, etc. are now covered by such deposit schemes. Banks are also reaching even minor students in the classrooms.
Thus we see that the banks in India are doing a great service to the country by mobilising the savings of the people and utilising them gainfully towards all-round national development.
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