RAS question
In which year were 14 major commercial banks nationalised in India?
Correct answer: (B) 1969.
India nationalised 14 major commercial banks in 1969.
Explanation
On 19 July 1969, India nationalised 14 major commercial banks whose deposits exceeded ₹50 crore. The RBI report gives the institutional background: until that point, commercial banks were largely privately held, and many were controlled by business houses. These banks were falling short of social objectives, which explains why nationalisation was used as a policy instrument rather than as a routine ownership change. The first round brought 14 major commercial banks under public-sector banking in 1969; the separate 1980 round covered six more. For this exam item, the marker is the first round under Prime Minister Indira Gandhi, aimed at expanding banking to rural areas and promoting financial inclusion.
Why the other options are wrong
- (A) 1991 belongs to the economic-reforms phase, when private banking was opened up again after liberalisation, not to the first nationalisation of 14 major commercial banks.
- (C) 1980 was the second round of bank nationalisation, covering six more commercial banks rather than the first round of 14 major commercial banks.
- (D) 1955 marks the formation of the State Bank of India from the Imperial Bank, so it is a different banking milestone from the 1969 nationalisation of 14 major commercial banks.
Concept
This tests post-Independence banking reforms within Indian Economy: candidates must separate the 1969 first bank-nationalisation round from the 1980 second round and the 1991 liberalisation phase. It recurs in RAS because bank nationalisation links ownership, social objectives and financial inclusion.