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NATIONALIZATION
SUBMITTED BY: AMAN SHAH
GARIMA VERMA
JANHAVI
JATIN MITTAL
SUDARSHAN
EVOLUTION OF INDIAN BANKING
SYSTEM
 Reserve Bank of India:
1. Initially established in 1935
2. Transfer to Public Ownersh...
NATIONALIZATION
 Nationalization is the process of taking a private industry or private
assets into public ownership by a...
NEED FOR NATIONALIZATION
 Private commercial banks were not fulfilling the social and
developmental goals of banking whic...
1969
 Public has lesser confidence in the banks.
 Led to slower deposit mobilization.
 Savings bank facility provided b...
2013
 After nationalisation, public sector bank branches rose to
approximately 800% in deposits and advances took a huge ...
EFFECTS OF NATIONALIZATION
 Increase in number of branches
 More concentration of banks in rural, unbanked and under
ban...
BRANCH EXPANSION
 As a result of nationalization, the number of bank branches increased rapidly
 8262 branches (July 196...
INCREASE IN DEPOSITS
 Expansion of banking system led to increase in the amount of
deposits.
 1969:
1. Deposits: 4880 cr...
LENDINGS
 We can also see an increase in loans after the reform period
 1969:
1. Loans: 3,06,829 lakh rupees
 2013:
1. ...
CREDIT
 1969:
1. 3,64,847 lakh rupees
 2012:
1. 46,11,800 Crore rupees
PRIORITY SECTOR LENDINGS
PRIORITY SECTOR LENDINGS
 SCB loan to priority sector 14710 billion = 14.7 lakh crore
 Share of priority sector advances...
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Evolution of Indian Banking System

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This would give you a brief idea of how the Indian Banking System Evolved during the Nationalization period.

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Evolution of Indian Banking System

  1. 1. NATIONALIZATION SUBMITTED BY: AMAN SHAH GARIMA VERMA JANHAVI JATIN MITTAL SUDARSHAN
  2. 2. EVOLUTION OF INDIAN BANKING SYSTEM  Reserve Bank of India: 1. Initially established in 1935 2. Transfer to Public Ownership in 1949  Three phases of Indian Banking System: 1. Early phase (1935 – 1969) 2. Nationalization of Indian Banks and up to 1991 prior to Indian banking sector Reforms. 3. New phase with the advent of Indian Financial & Banking Sector Reforms (post-1991).
  3. 3. NATIONALIZATION  Nationalization is the process of taking a private industry or private assets into public ownership by a national government or state  14 banks nationalized in 1969  6 banks nationalized in 1980  Steps taken by the Government of India to Regulate Banking Institutions in the Country: 1. 1949 : Enactment of Banking Regulation Act. 2. 1955 : Nationalisation of State Bank of India. 3. 1959 : Nationalisation of SBI subsidiaries. 4. 1961 : Insurance cover extended to deposits. 5. 1969 : Nationalisation of 14 major banks.
  4. 4. NEED FOR NATIONALIZATION  Private commercial banks were not fulfilling the social and developmental goals of banking which are so essential for any industrialising country.  Despite the enactment of the Banking Regulation Act in 1949 and the nationalisation of the largest bank, the State Bank of India, in 1955, the expansion of commercial banking had largely excluded rural areas and small-scale borrowers.
  5. 5. 1969  Public has lesser confidence in the banks.  Led to slower deposit mobilization.  Savings bank facility provided by the Postal department was comparatively safer.  Moreover, loans were largely given to traders.
  6. 6. 2013  After nationalisation, public sector bank branches rose to approximately 800% in deposits and advances took a huge jump by 11,000%.  Banks with Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.  After 1991 reforms and technological up gradation of the banks, the situation is such that the country is flooded with foreign banks and their ATM stations.  Efforts are being put to give a satisfactory service to customers.  Phone banking and net banking is introduced. The entire system became more convenient and swift.
  7. 7. EFFECTS OF NATIONALIZATION  Increase in number of branches  More concentration of banks in rural, unbanked and under banked areas  Increase in deposits, lendings  Priority sector lendings were introduced.
  8. 8. BRANCH EXPANSION  As a result of nationalization, the number of bank branches increased rapidly  8262 branches (July 1969) to 64980 (June 1999), 68339 (June 2005) and 71839 (March 2007)  Out of all bank offices, Rural banks made up: 1. 22.4% in June 1969 2. 50.5% in June 1999  Breakdown of bank branch structure in June 2005: 1. Rural: 47.0% 2. Semi Urban: 22.5% 3. Urban: 16.8% 4. Metropolitan: 13.7%  2012: 1. No. of branches in India: 101261 2. No. of commercial banks – 173 (scheduled: 169, non scheduled: 4) 3. RRB branches: 82
  9. 9. INCREASE IN DEPOSITS  Expansion of banking system led to increase in the amount of deposits.  1969: 1. Deposits: 4880 crore rupees  2012: 1. Aggregate Deposits in SCB 59090 billions: 59.09 lakh crore
  10. 10. LENDINGS  We can also see an increase in loans after the reform period  1969: 1. Loans: 3,06,829 lakh rupees  2013: 1. 919189 Crore Rupees  It is increasing at the rate of 10-15% per year since the nationalization.
  11. 11. CREDIT  1969: 1. 3,64,847 lakh rupees  2012: 1. 46,11,800 Crore rupees
  12. 12. PRIORITY SECTOR LENDINGS
  13. 13. PRIORITY SECTOR LENDINGS  SCB loan to priority sector 14710 billion = 14.7 lakh crore  Share of priority sector advances = 29%

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