The Banking Companies Act Of 1970
2. What are the objectives & achievements of bank nationalization in India?
Objectives-
According to the Banking Companies Act, 1970, the aim of nationalization of banks in India is “to control the heights of the economy and to meet progressively and serve better the needs of development of the economy in conformity with national policy and objectives.” 1. The elimination of concentration of economic power in the hands of a few 2. diversification of the flow of bank economic credit towards priority sectors such as agriculture, small industry and exports, weaker sections and backward areas 3. fostering of new classes of entrepreneurs, so as to create, sustain and accelerate economic growth 4. professionalisation of bank management 5. providing adequate training as well as reasonable terms of service to bank staff 6. extending banking facilities to unbanked rural areas and semi rural areas to mobilize savings of people to the largest possible extent and to utilize for productive purposes 7. to curb the use of bank credit for speculative and other unproductive purposes 8. to bring banks under the control of RBI Achievements 1. Accelerated branch expansion in rural and backward regions- in 1969 bank branches in rural areas accounted to only 22.5% of the total number of branches. Today branches in rural areas account to 52% 2. Deposit mobilization-after nationalization banks attract deposits from different sections by means of attractive deposit schemes 3. Finance to priority sectors- In 1969 the total credit given to priority sectors like agriculture, small industries and rural development was only 2% of total bank credit. By 2006-2007 in increased to around 40% of total credit 4. Increase in total transactions-the total deposits which was 4,664 crores in 1969 increased to 38.30 trillion 5. Differential rate of interest-to provide credit to weaker sections of the
Objectives-
According to the Banking Companies Act, 1970, the aim of nationalization of banks in India is “to control the heights of the economy and to meet progressively and serve better the needs of development of the economy in conformity with national policy and objectives.” 1. The elimination of concentration of economic power in the hands of a few 2. diversification of the flow of bank economic credit towards priority sectors such as agriculture, small industry and exports, weaker sections and backward areas 3. fostering of new classes of entrepreneurs, so as to create, sustain and accelerate economic growth 4. professionalisation of bank management 5. providing adequate training as well as reasonable terms of service to bank staff 6. extending banking facilities to unbanked rural areas and semi rural areas to mobilize savings of people to the largest possible extent and to utilize for productive purposes 7. to curb the use of bank credit for speculative and other unproductive purposes 8. to bring banks under the control of RBI Achievements 1. Accelerated branch expansion in rural and backward regions- in 1969 bank branches in rural areas accounted to only 22.5% of the total number of branches. Today branches in rural areas account to 52% 2. Deposit mobilization-after nationalization banks attract deposits from different sections by means of attractive deposit schemes 3. Finance to priority sectors- In 1969 the total credit given to priority sectors like agriculture, small industries and rural development was only 2% of total bank credit. By 2006-2007 in increased to around 40% of total credit 4. Increase in total transactions-the total deposits which was 4,664 crores in 1969 increased to 38.30 trillion 5. Differential rate of interest-to provide credit to weaker sections of the