In which year fourteen banks were nationalized after independence ?

Question

Accepted Answer

The correct option is 3:
The historic first major wave of bank nationalization in India occurred in 1969. On July 19, 1969, under the leadership of Prime Minister Indira Gandhi, the government issued the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, which led to the nationalization of 14 of the largest private sector commercial banks. This move was a critical step aimed at aligning the banking sector with the developmental goals of the country. The main objective was to ensure that credit flowed primarily to priority sectors, such as agriculture and small industries, rather than being concentrated in the hands of a few large industrial houses, thereby promoting social banking and economic equality. These 14 banks were those with deposits exceeding ₹50 crore.

The incorrect option is 1:
1949 is incorrect because this year is primarily associated with the nationalization of the Reserve Bank of India (RBI) under the Reserve Bank of India Act, 1948. Commercial banks were still in private hands in 1949.

The incorrect option is 2:
1959 is incorrect. While major policy changes took place in this era, the mass nationalization of 14 commercial banks did not happen then. The government did take steps to nationalize one major bank, the State Bank of India (SBI), which was formed by the nationalization of the Imperial Bank of India in 1955.

The incorrect option is 4:
1979 is incorrect. While another phase of bank nationalization did occur, it happened later, in 1980, when six more commercial banks were nationalized. The initial and most famous round involving 14 banks was ten years earlier, in 1969.