PERFORMANCE OF

NATIONALISED BANKS

Presentation by:

NAGAMANI MERUGA II MBA

History of banks

The General Bank of India was set up in the year 1786

Next came Bank of Hindustan and Bengal Bank

The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks

Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up

Reserve Bank of India came in 1935.

In this stage the growth was very slow and banks also experienced periodic failures between 1913 and 1948

History of banks continues…… To streamline the functioning and activities of

commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965).

Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority.

Seven banks forming subsidiary of State Bank of India was nationalised in 1960 on 19th July, 1969, major process of nationalisation was carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country was nationalised.

History of banks continues……… Nationalisation of Indian Banking Sector Reform was

carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under Government ownership.

The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country:

→1949 : Enactment of Banking Regulation Act. →1955 : Nationalisation of State Bank of India. →1959 : Nationalisation of SBI subsidiaries. →1961 : Insurance cover extended to deposits. →1969 : Nationalisation of 14 major banks. →1971 : Creation of credit guarantee corporation. →1975 : Creation of regional rural banks. →1980 : Nationalisation of seven banks with

deposits over 200 crore.

History of banks continues……. After the nationalisation of banks, the branches of

the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11,000%.

Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.

Banking in India

Central bank Reserve Bank of India

Nationalised banks

Allahabad Bank · Andhra Bank · Bank of Baroda · Bank of India · Bank of Maharashtra · Canara Bank · Central Bank of India · Corporation Bank · Dena Bank · IDBI Bank · Indian Bank · Indian Overseas Bank · Oriental Bank of Commerce · Punjab & Sind Bank · Punjab National Bank · Syndicate Bank · UCO Bank · Union Bank of India · United Bank of India · Vijaya Bank

State Bank Group

State Bank of India · State Bank of Bikaner & Jaipur · State Bank of Hyderabad · State Bank of Indore · State Bank of Mysore · State Bank of Patiala · State Bank of Travancore

Private banks

Axis Bank · Bank of Rajasthan · Bharat Overseas Bank · Catholic Syrian Bank · City Union Bank · Development Credit Bank · Dhanalakshmi Bank · Federal Bank · Ganesh Bank of Kurundwad · HDFC Bank · ICICI Bank · IndusInd Bank · ING Vysya Bank · Jammu & Kashmir Bank · Karnataka Bank Limited · Karur Vysya Bank · Kotak Mahindra Bank · Lakshmi Vilas Bank · Nainital Bank · Ratnakar Bank · Rupee Bank · Saraswat Bank · SBI Commercial and International Bank · South Indian Bank · Tamil Nadu Mercantile Bank · YES Bank

Foreign banks

ABN AMRO · Abu Dhabi Commercial Bank · Antwerp Diamond Bank · Arab Bangladesh Bank · Bank International Indonesia · Bank of America · Bank of Bahrain & Kuwait · Bank of Ceylon · Bank of Nova Scotia · Bank of Tokyo Mitsubishi UFJ · Barclays Bank · Citibank India · HSBC · Standard Chartered · Deutsche Bank  · Royal Bank of Scotland

Regional Rural banks

South Malabar Gramin Bank · North Malabar Gramin Bank · Pragathi Gramin Bank · Shreyas Gramin Bank

Financial Services

Real Time Gross Settlement(RTGS)  · National Electronic Fund Transfer (NEFT) · Structured Financial Messaging System (SFMS) · CashTree · Cashnet · Automated Teller Machine (ATM)

Nationalisation

Definition: Nationalisation means the taking of control by the

government over assets and over a corporation, usually by acquiring the majority or the whole stake in the corporation.

Bank in a system of federally chartered privately owned banks in the United States, each required by law to be an investing member of its district Federal Reserve Bank and insured by the Federal Deposit Insurance Corporation.

A bank associated with national finances and usually owned or controlled by a government.

Nationalisation By the 1960s, the Indian banking industry had become an important

tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the possibility to nationalise the banking industry.

Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalisation." The paper was received with positive enthusiasm.

Thereafter, her move was swift and sudden, and the GOI issued an ordinance and nationalised the 14 largest commercial banks with effect from the midnight of July 19, 1969.

Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969.

A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the GOI controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalized banks and resulted in the reduction of the number of nationalised banks from 20 to 19. After this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

Nationalisation continues………..

Prime Minister Indira Gandhi addressing members of a taxi drivers' union in Delhi who visited her to express their support for the

nationalisation of 14 banks, in 1969.

Activities Serving as an apex financing agency for the institutions providing

investment and production credit for promoting the various developmental activities in rural areas

Taking measures towards institution building for improving absorptive capacity of the credit delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, training of personnel, etc.

Co-ordinating the rural financing activities of all institutions engaged in

developmental work at the field level and maintains liaison with Government of India, State Governments, Reserve Bank of India (RBI) and other national level institutions concerned with policy formulation; and

undertaking monitoring and evaluation of projects refinanced by it.

It gives the state influence over the process of financial intermediation and allows the government to use the banking industry as a lever to advance its development efforts. In particular, it allows for the mobilisation of technical and scientific talent to deliver both credit and technical support to agriculture and the small-scale industrial sector.

The importance of public ownership in realising these objectives cannot be overstressed, since it requires subordinating the profit motive to larger social goals, which would not be acceptable to a privately owned and controlled banking system.

Continues…

The nationalised banks were credited by some, including Home minister P. Chidambaram, to have helped the Indian economy withstand the global financial crisis of 2007-2009.

The only biggest advantage to have an a/c with Nationalised banks is they have branches in almost all the towns and their low cost of maintaining an a/c.

Continues…

Vijaya Bank, a medium sized bank with presence across India was founded on 23 October 1931 by the late Shri A.B.Shetty and other enterprising farmers in Mangalore, Karnataka in India.

The objective of the founders was essentially to promote banking habits, thrift and entrepreneurship among the farming community of Dakshina Kannada district in Karnataka State.

The bank became a scheduled bank in 1958.Vijaya Bank steadily grew into a large All India bank, with nine smaller banks merging with it during the 1963-68. The credit for this merger as well as growth goes to late Shri M.Sunder Ram Shetty, who was then the Chief Executive of the bank. The bank was nationalised on 15 April 1980.

It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806.

The bank was redesigned as the Bank of Bengal, three years later, on 2 January 1809.

It was the first ever joint-stock bank of the British India, established under the sponsorship of the Government of Bengal

Subsequently, the Bank of Bombay (established on 15 April 1840) and the Bank of Madras (established on 1 July 1843) followed the Bank of Bengal.

These three banks dominated the modern banking scenario in India, until when they were amalgamated to form the Imperial Bank of India, on 27 January 1921.

An important turning point in the history of State Bank of India is the launch of the first Five Year Plan of independent India, in 1951.

The State Bank of India (SBI) was established on 1 July 1955. This resulted in making the State Bank of India more powerful, because as much as a quarter of the resources of the Indian banking system were controlled directly by the State. Later on, the State Bank of India (Subsidiary Banks) Act was passed in 1959. The Act enabled the State Bank of India to make the eight former State-associated banks as its subsidiaries.

State Bank of Bikaner and Jaipur (SBBJ) State Bank of Hyderabad (SBH) State Bank of India (SBI) State Bank of Indore (SBIR) State Bank of Mysore (SBM) State Bank of Patiala (SBP) State Bank of Saurashtra (SBS) State Bank of Travancore (SBT)

The Industrial Development Bank of India Limited was established as a wholly-owned subsidiary of Reserve Bank of India.

The foundation of the bank was laid down under an Act of Parliament, in July 1964. The main aim behind the setting up of IDBI was to provide credit and other facilities for the Indian industry, which was still in the initial stages of growth and development.

In February 1976, the ownership of IDBI was transferred to Government of India.

Today, IDBI Bank is counted amongst the leading public sector banks of India, apart from claiming the distinction of being the 4th largest bank, in overall ratings.

This is because of its wide network of 509 branches, 900 ATMs and 319 centers. Apart from being involved in banking services, IDBI has set up institutions like The National Stock Exchange of India (NSE), The National Securities Depository Services Ltd. (NSDL) and the Stock Holding Corporation of India (SHCIL).

UCO Bank is a commercial bank established in 1943. The idea to establish the bank was first conceived by G.D. Birla, the famous industrialist, after the historic 'Quit India Movement' in 1942.

Along with 13 other major commercial banks of India, United Commercial Bank was nationalized on 19th July, 1969, by the Government of India.

Under the act of Indian Parliament, in 1985, its name changed from United Commercial Bank to the present name, UCO Bank. As of 2005, the bank has 2000 Service Units spread all over India. A distinctive feature of UCO bank is its introduction of 'NO HOLIDAY' branches

Andhra Bank is an Indian bank based in Hyderabad. The bank was established in the year 1923, and its founder was Dr. Bhogaraju Pattabhi Sitaramayya, a well known freedom fighter. The initial authorized capital of the bank was Rs. 10.00 lacs, while the paid up capital was Rs. 1.00 lac at the time of its registration.

The bank had 1,410 branches spread across 22 states and 2 Union Territories, out of which 1,067 branches have been enabled with Centralized Core Banking Solution (CBS).

Andhra Bank is the first bank in India to have launched mobile biometric ATMs.

Apart from regular banking services and solutions, Andhra Bank has introduced some attractive services such as AB Premium Current Account and AB Privilege Corporate Salary Savings Bank Account with extra benefits to the customers

Punjab National Bank (PNB) is the second largest government-owned commercial bank in India. Having more than 3.5 crore customer, Punjab National Bank has one of the largest branch networks in India

The bank was established in 1895 at Lahore.

It holds the distinction of being the first Indian bank to have been started solely with Indian capital. In 1969, it was nationalized by the Government of India along with 13 other banks.

Thank you...

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