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Nationalised banks

The history of nationalization of Indian banks dates back to the year 1955 when the ImperialBank of India was nationalized and re-christened as State Bank of India (under the SBI Act,1955). Later on July 19, 1960, the 7 subsidiaries of SBI viz. State Bank of Hyderabad (SBH),

State Bank of Indore, State Bank of Saurashtra (SBS), State Bank of Mysore (SBM), State Bank of Bikaner and Jaipur (SBBJ), State Bank of Patiala (SBP), and State Bank of Travancore (SBT)were also nationalized with deposits more than 200 crores.The InitiativeThe banking industry in India became a major tool for the development of country's economy bythe 1960. The industry also became a large employer creating a number of opportunities for the

job-seekers. In order to spread banking infrastructure in rural areas, the then Prime Minister,Indira Gandhi took the initiative to nationalize some commercial banks. She submitted a paper Stray thoughts on Bank Nationalisation in the All India Congress Meeting, which got positivefeedback. On July 19, 1969, 14 commercial banks were nationalized, which got presidentialapproval on August 9, 1969.

In 1980, in order to provide government more power and command over credit delivery, sixmore commercial banks in India were nationalized. In 1993, New Bank of India merged withPunjab National Bank (PNB), which brought the number of nationalized banks in India to 19. It'salso the only merger between two Indian nationalized banks. In the following years, thenationalized banks in India saw a growth rate of around 4%, which was close to average growthrate of country's economy.

List of Nationalised Banks in India

Following is the list of Nationalised Banks in India:

1. Allahabad Bank 2. Andhra Bank 3. Bank of Baroda 4. Bank of India 5. Bank of Maharashtra 6. Canara Bank 7. Central Bank of India 8. Corporation Bank 9. Dena Bank 10. Indian Bank 11. Indian Overseas Bank 12. Oriental Bank of Commerce 13. Punjab & Sind Bank

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14. Punjab National Bank 15. Syndicate Bank 16. UCO Bank 17. Union Bank of India18. United Bank of India

19. Vijaya Bank

Global Banking IndustryThe world of commercial banking is undergoing a deep transformationas a result of marketable instruments competing with loansand demand deposits. Because of this strong competition, commercialbanks are struggling to make acceptable margins from their traditionalbusiness entering into investment banking.Increasing competition has forced banks to search for more incomeat the expense of more risk. Banks that lent heavily to Asia in search of better returns than those available in Western markets are now beingblamed for bad credit decisions. The Asian crisis has renewed interest oncredit risk management casting doubts on the effectiveness of currentcredit regulations. Technological changes have also heightened competitionby making it easier to imitate bank services. The traditional advantageof physical proximity to clients given by extended networks of branches has vanished. Banks have to compete with money market mutualfunds for deposit business, commercial papers, and medium-termnotes for bank loans.

As margins are squeezed, commercial banks in the United States andEurope have been forced to cut costs and branches while diversifyinginto pensions, insurance, asset management, and investment banking.In the United States, many banks call themselves financial service companieseven in their reported financial statements. Diversification, however,has not always proved to be an effective strategy, and many bankshave had to revert to a concentrated business. These examples illustratehow commercial banks are reinventing themselves, not just once butmany times. All these changes are creating an identity crisis for oldfashionedbankers, leading to the key question, What is a bank today?The question is difficult, but evidence suggests that the concept of bankingis being modified and the traditional barriers among financial servicesubindustries (retail banking, private banking, investment banking, assetmanagement, insurance, etc.) are vanishing.Illustrating what an entity does or serves for often is a useful way todefine it. The identity crisis of banksespecially commercial banksstems from the deep and rapid changes in their traditional body of activities(particularly retail and corporate banking). On the other hand, investmentbanking, private banking, and bancassurance are the mostprofitable and fastest growing segments of the financial service industry.

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