After the big step of nationalization of private banks by the Prime Minister Mrs.Indira Gandhi now there is another big step to allow the private banks to operate again. That was nationalization and it is liberalization. The public sector banks will remain in operation as it is. Now the banking sector India has been brought under joint sector.
Before the nationalization the bank were business and urban orientated and confined to big cities. There were many district headquarters without any bank branch.
Before the British Rule the local system of money lending was limited activity to give in difficulty or distress to individual against mortgage of ornament, house or farm. The rich class use to keep their wealth safe hidden under earth. It was unproductive being out of circulation.
With the advent of banking in India now the bank loans are capital for economic activities. It is no more a distress call but trade and business activities for prosperity.
The Reserve Bank of India has been vested with more powers to safeguard the interest of depositors and share holders. It can supersede bank boards and appoint new Directors and Chairman. The RBI can inspect account books of the bank holding all other business establishments. It has been empowered with a veto power to prevent bulk purchases of bank shares.
With the Government policy to disburse subsidy to the actual user the network of banks deep inside the rural areas are also required. By such measures to issue licenses to corporate sectors to open banks the gap will be filled with bank branches there.
The foreign investment in the banking sector will give to help to have reserves of foreign currencies also. The launch of new private banks will take alteast a year’s time, the big industrial houses, Tata, Birla, Bajaj, Larsen and Toubro are keen to flat banking companies.
Presently the banking sector is employing more than 7 lakh employees and with the expansion 6 lakhs more will be employed.
With the easy availability of consumers loans and rising cost there is sharp decline in the ‘Saving Habit’ of the people. With so many new banks the field the banks will offer lucrative offers to the public to deposit money with their banks.
Founder : Late Shri Ramgopal Maheshwari