Banking & Financial Awareness Quiz: Bank Nationalisation and Mergers

The All India Rural Credit Survey Committee found that rural credit needed a bank with a nationwide branch network, so Parliament passed the State Bank of India Act, 1955, and the Imperial Bank of India was taken over and renamed the State Bank of India with effect from 1 July…

SIDBI was set up under the Small Industries Development Bank of India Act, 1989 and began operations in 1990 as the principal financial institution for the promotion, financing and development of micro, small and medium enterprises.

On 19 July 1969 the government promulgated an ordinance nationalising fourteen major commercial banks, each of which held deposits of fifty crore rupees or more.

On 15 April 1980 six private banks whose deposits were two hundred crore rupees or more were nationalised: Andhra Bank, Corporation Bank, New Bank of India, Oriental Bank of Commerce, Punjab and Sind Bank, and Vijaya Bank.

The Reserve Bank of India began as a shareholders' institution in 1935 and was taken into full government ownership from 1 January 1949 under the Reserve Bank of India (Transfer to Public Ownership) Act, 1948.

New Bank of India, one of the six banks nationalised in 1980, ran into heavy losses and was amalgamated with Punjab National Bank in 1993.

Under the amalgamation notified with effect from 1 April 2020, Syndicate Bank was merged into Canara Bank. Both banks had their roots in coastal Karnataka, Canara Bank at Mangaluru and Syndicate Bank at Udupi, so the merged bank kept a strong base in the same region.

Allahabad Bank, founded in 1865 and one of the fourteen banks nationalised in 1969, was amalgamated into Indian Bank with effect from 1 April 2020.

With effect from 1 April 2019, Vijaya Bank of Karnataka and Dena Bank of Gujarat were merged into Bank of Baroda.

The cut off used in the first round of nationalisation was deposits of fifty crore rupees or more as on the relevant date, and fourteen banks crossed it.

R. C. Cooper, a shareholder and director of one of the affected banks, challenged the law of 1969, and an eleven judge bench of the Supreme Court struck it down because the compensation provided for the acquired undertakings was not adequate and the banks were barred from carrying on business.

From 1 April 2017 the State Bank of India absorbed its five remaining associate banks, the State Bank of Bikaner and Jaipur, the State Bank of Hyderabad, the State Bank of Mysore, the State Bank of Patiala and the State Bank of Travancore, together with Bharatiya Mahila Bank, which had…