What was the reason behind Nationalisation of banks?

Even after Independence, many people in rural areas were completely dependent on private money lenders for any kind of financial assistance. Hence, the Government of India decided to nationalise the scheduled commercial banks having deposits of more than 50 crores, to better serve the needs of the economic development in conformity with national policy objectives. You can read about the Pradhan Mantri Jan-Dhan Yojana (PMJDY) – National Mission for Financial Inclusion in the given link.

The Government of India nationalized 14 private banks in 1969.

Further readings:

  1. Types of Non Banking Financial Institutions India
  2. RBI – Reserve Bank of India [UPSC Indian Economy Notes]

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