Banks in India – Nationalisation of Banks

Despite the provisions, control and regulations of Reserve Bank of India, banks in India except the State Bank of India or SBI, continued to be owned and operated by private persons. By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy. At the same time, it had emerged as a large employer, and a debate had ensued about the nationalization of the banking industry. Indira Gandhi, then Prime Minister of India, expressed the intention of the Government of India in the annual conference of the All India Congress Meeting in a paper entitled “Stray thoughts on Bank Nationalisation.”[2] The meeting received the paper with enthusiasm. Thereafter, her move was swift and sudden. The Government of India issued an ordinance (‘Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969’)) and nationalised the 14 largest commercial banks with effect from the midnight of July 19, 1969. These banks contained 85 percent of bank deposits in the country.[2] Jayaprakash Narayan, a national leader of India, described the step as a “masterstroke of political sagacity.”

Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969. A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the Government of India controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalized banks and resulted in the reduction of the number of nationalised banks from 20 to 19. After this, until the 1990s, the nationalised banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy.

Privatisation of Indian Banks
In the early 1990s, the then Narasimha Rao government embarked on a policy of liberalization, licensing a small number of private banks. These came to be known as New Generation tech-savvy banks, and included Global Trust Bank (the first of such new generation banks to be set up), which later amalgamated with Oriental Bank of Commerce, UTI Bank (since renamed Axis Bank), ICICI Bank and HDFC Bank. This move, along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private banks and foreign banks. The next stage for the Indian banking has been set up with the proposed relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights which could exceed the present cap of 10%,at present it has gone up to 74% with some restrictions. The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4 method (Borrow at 4%;Lend at 6%;Go home at 4) of functioning.

The new wave ushered in a modern outlook and tech-savvy methods of working for traditional banks.All this led to the retail boom in India. People not just demanded more from their banks but also received more. Currently (2010), banking in India is generally fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. One may also expect M&As, takeovers, and asset sales. In March 2006, the Reserve Bank of India allowed Warburg Pincus to increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than 5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the private sector banks would need to be vetted by them. In recent years critics have charged that the non-government owned banks are too aggressive in their loan recovery efforts in connection with housing, vehicle and personal loans. There are press reports that the banks’ loan recovery efforts have driven defaulting borrowers to suicide

List of Nationalised Banks
1.Allahabad Bank
2.Andhra Bank
3.Bank of Baroda
4.Bank of India
5.Bank of Maharashtra
6.Canara Bank
7.Central Bank of India
8.Corporation Bank
9.Dena Bank
10.IDBI Bank
11.Indian Bank
12.Indian Overseas Bank
13.Oriental Bank of Commerce
14.Punjab and Sind Bank
15.Punjab National Bank
16.Repco Bank
17.State Bank of Bikaner & Jaipur
18.State Bank of Hyderabad
19.State Bank of India
20.State Bank of Mysore
21.State Bank of Patiala
22.State Bank of Travancore
23.Syndicate Bank
24.UCO Bank
25.Union Bank of India
26.United Bank of India
27.Vijaya Bank

List of New private-sector banks
•HDFC Bank
•Karnataka Bank
•ICICI Bank
•Kotak Mahindra Bank
•Yes Bank
•IndusInd Bank
•ING Vysya Bank
•Karur Vysya Bank
•Laxmi Vilas Bank
•City Union Bank
•South Indian Bank
•Axis Bank
•Federal Bank
* [[ U.P.AGRO BANK CORPORATION LTD] ]

Foreign banks operating in India
•ABN AMRO Bank N.V. (Now merged with RBS)(Applied for withdraw of Retail Bank License)
•Abu Dhabi Commercial Bank
•American Express Bank
•Australia and New Zealand Bank
•Bank Internasional Indonesia
•Bank of America NA
•Bank of Bahrain and Kuwait
•Bank of Ceylon
•Bank of Nova Scotia (Scotia Bank)
•Bank of Tokyo Mitsubishi UFJ

•Barclays Bank PLC
•BNP Paribas
•Calyon Bank
•Chinatrust Commercial Bank
•Citibank N.A.
•Credit Suisse
•Commonwealth Bank of Australia (Recently Launched Retail Services in Mumbai)
•DBS Bank
•DCB Bank now RHB Bank
•Deutsche Bank AG
•FirstRand Bank
•HSBC

•JPMorgan Chase Bank
•Krung Thai Bank
•Mashreq Bank psc
•Mizuho Corporate Bank
•Royal Bank of Scotland
•Shinhan Bank
•Société Générale
•Sonali Bank
•Standard Chartered Bank
•State Bank of Mauritius
•UBS
•VTB

Indian Banks with business outside India
List of subsidiaries of Indian Banks abroad as on November 30, 2007:[1] Name of the BankName of the CentreNotes
Andhra BankNew Jersey, Dubai, Malaysia

Allahabad BankHongkong

AXIS BANK Ltd.Hongkong, Singapore

SBI (Canada) Ltd.
Toronto, Vancouver, Mississauga

SBI (Japan) Ltd.
Tokyo, Osaka

SBI (California) Ltd.
Los Angeles, Artesia, San Jose (Silicon Valley)

SBI Finance Inc.Delaware, U.S.A.

SBI International (Mauritius)
Mauritius (Off-shore Bank)

SBI (China) Ltd.Shanghai

SBI (Singapore) Ltd.Singapore

Bank of Baroda (Uganda) Ltd.
Uganda

Bank of Baroda (Kenya) Ltd.
Kenya

Bank of Baroda (Ghana) Ltd.
Accra, Ghana

Bank of Baroda (U.K.) Nominee Ltd.
London, United Kingdom

Bank of Baroda (Hong Kong) Ltd.
Hong Kong (Converted into Restricted Licensed Bank)
Bank of India (Japan) Ltd.
Tokyo, Osaka

Bank of India Finance (Kenya) Ltd.
Kenya

Canara BankHongkong, United Kingdom

IOB Properties Pte Ltd.Singapore

Bank of Baroda (Botswana) Ltd.
Gaborone, Botswana

Bank of Baroda (Guyana) Inc.
Georgetown, Guyana (South America)

ICICI Bank (U.K.) Ltd
London (U.K.)

ICICI Bank (Canada)Ltd
Toronto (Canada)

Bank of Baroda (Tanzania) Ltd.
Tanzania

HPD BENEFIT FUND LTD (A QUASI BANK) Ltd.
RACHI EGYPT

Bank of Baroda (United Arab Emirate)
Dubai, Abu Dhabi, Ras Al Khaimah, Deira, Dammam, Salalah, Al Ain

Bank of BarodaMuscat, Oman

Bank of BarodaBrussels, Belgium

ICICI Bank Eurasia LLCRussia

PT Bank IndomonexIndonesia

Indian Ocean International Bank Ltd. (IOIB)Port Louis, Mauritius

Punjab National Bank International Limited (PNBIL)London, United Kingdom

Bank of Baroda (Trinidad and Tobago) LimitedTrinidad & Tobago

PT Bank Swadesi TbkIndonesia

Bank of Baroda (Trinidad and Tobago) LimitedTrinidad & Tobago

Syndicate BankUnited Kingdom

UCO BankHongkong, Singapore

Foreign banks with business in India
Banks with branches in India.[2]
•ABN AMRO Bank N.V. – Royal Bank of Scotland
•Abu Dhabi Commercial Bank Ltd
•American Express Bank
•Antwerp Diamond Bank
•Arab Bangladesh Bank
•Bank International Indonesia
•Bank of America
•Bank of Bahrain & Kuwait
•Bank of Ceylon
•Bank of Nova Scotia
•Bank of Tokyo Mitsubishi UFJ
•Barclays Bank
•BNP Paribas
•Calyon Bank

•ChinaTrust Commercial Bank
•Citibank
•DBS Bank
•Deutsche Bank
•HSBC (Hongkong & Shanghai Banking Corporation)
•JPMorgan Chase Bank
•Krung Thai Bank
•Mashreq Bank
•Mizuho Corporate Bank
•National Australia Bank
•Shinhan Bank
•Société Générale

•Sonali Bank
•Standard Chartered Bank
•State Bank of Mauritius
•UBS
Nationalised Bank VS Pvt. Sector Bank
A Nationalized bank is one that is owned by the government of the country. Since the people decide who the government is, they are also referred to as public sector banks. The government is responsible for the money deposited into the accounts of these banks.

A private sector bank is one that is owned by an independent individual or a company that is controlled by a few individuals. In short, the bank is owned by someone else and they run the bank. The person owning/running the bank is responsible for the money deposited into the accounts of these banks. A nationalised bank is majority owned by the state/government/people. In privatebank majority of the shares are owned by an a buniness group/public throught the bank’a share shares. National banks are big interms of assets nad capital as it is owned by government of the public. And private banks are smaller as they are owned by private group in general in India. Services of National banks are not that good as compared to Private sector banks as private sector banks appoints more efficient people and and they are more computerised banking system savay.