How many Nationalized Banks are there, in India (September, 2023) ?

Question

Accepted Answer

The correct option is 3:
The number of Public Sector Banks (often referred to as Nationalized Banks) in India was reduced to 12 following a major consolidation plan implemented by the Government of India, effective from April 1, 2020. This significant rationalization involved the merger of ten public sector banks into four larger entities. Before this round of mergers, the count stood at 18 Public Sector Banks. The core objective of this strategic consolidation was to create fewer, stronger, and globally competitive banks, improve operational efficiency, and strengthen the banking sector's balance sheet to meet increasing credit demands. As of September 2023, this structure of 12 Public Sector Banks remains the current and correct count.

The incorrect option is 1 (8):
The figure 8 is incorrect because it reflects a number lower than the current count of nationalized banks. The recent mergers in 2020 resulted in 12 anchor banks. A count of 8 would represent a further drastic reduction that has not taken place as of September 2023. While the government's long-term goal might involve more consolidation, that policy has not been implemented yet to bring the count down to 8. Therefore, selecting 8 misrepresents the current structure of the Indian public sector banking system.

The incorrect option is 2 (10):
The number 10 is factually incorrect for the current structure. While the 2020 mega-merger scheme was based on merging ten banks into four, the final number of consolidated Public Sector Banks remaining in operation after the process was 12, not 10. The figure 10 might confuse students who recall the announcement of 10 banks being merged, but fail to remember the resultant total number of entities. The total count was finalized at 12 strong public sector banks.

The incorrect option is 4 (14):
The figure 14 is incorrect as it is higher than the current tally of 12 banks. This number could represent a count from a specific period immediately after some earlier rounds of consolidation, but before the comprehensive 2020 mega-merger. For instance, after the merger of Vijaya Bank and Dena Bank with Bank of Baroda, the count was higher, but the 2020 mergers brought the total down to 12. Therefore, 14 does not reflect the structural reality of the public sector banking landscape as of September 2023.