Indira Gandhi nationalised 14 commercial banks on July 19, 1969

Fifty-three years ago, on this day – July 19 – then Prime Minister Indira Gandhi announced the nationalization of 14 major commercial banks, which held 85 per cent of bank deposits in the country.

Some of these banks included Bank of Baroda, Allahabad Bank, Canara Bank, Central Bank of India, and the Punjab National Bank.

Gandhi had made the announcement in an address to the nation at 8.30 pm.

She said the decision was taken after the banks failed to help the farmers, the credit line for agricultural farming, and in focusing on small-scale industries and startups. The names were drawn based on capital stock reserve. Bank with a capital of more than ₹50 crore were selected for nationalization.

The Banking Regulation Act, 1949 was invoked to nationalize the banks.

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Another six banks were nationalized in 1980.

The Reserve Bank of India, was the first bank to be nationalized in 1949.

The government has attributed the bank nationalization and mergers to collapse of banks At least 361 banks failed between 1947 and 1955.

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Besides, banks while were mostly owned by private entities when India got its Independence, mostly favoured big businesses and ignored farmers and the rural sector, making the latter fall at the mercy of rural land sharks and money lenders. Banks were nationalized with the promise of helping farmers and rural businesses.