Question

Read the following statements and choose the correct option.

Assertion (A): On 19 July 1948, the Government of India nationalised the 14 largest commercial banks in India.

Reason (R): The move was aimed at expanding and making the banks' role inclusive in the country's socio-economic development.

• A. Both A and R are true, and R is the correct explanation of A.
• B. Both A and R are true, but R is not the correct explanation of A.
• C. A is true, but R is false.
• D. A is false, but R is true.

Answer 1

The correct option is D A is false, but R is true.

The second phase in the evolution of the banking system in India started in 1969 and extended till 1991. One of the significant moves during this period was the nationalisation of selected banks in India, i.e. the control of the banks was shifted to the Indian state.

In line with this idea, on 19 July 1969, the Government of India nationalised the 14 largest commercial banks in India. The nationalisation of the banks was done to channel the funds held by the banks to the major sectors of the economy, such as agriculture, and to encourage the overall development of young independent India.