(i) During the tenure of Prime Ministers Pandit Nehru and Lai Bahadur Shastri, banking was a monopoly of the private sector.
(ii) These banks represented different industrial groups. The Directors of these banks were working towards developing industrial sector and increasing its profit.
(iii) In order to stop this, the government nationalised the ‘Imperial Bank’ in 1955 and it got converted into State Bank of India.
(iv) This Bank opened several branches all over the country in a short while and played a major role in development.
(v) India had adopted a mixed economy after independence. Nationalisation of banks was essential to cover the deficits if they occurred while implementing different schemes.
(vi) Also the profit of these banks would come into the government treasury once they were nationalised. Prime Minister Indira Gandhi nationalised 14 banks on 19th July, 1969.
