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Public sector banks in India

Public Sector Undertakings (Banks) are a major type of government-owned banks in India, where a majority stake (i.e., more than 50%) is held by the Ministry of Finance (India) of the Government of India or State Ministry of Finance of various State Governments of India. The shares of these government-owned-banks are listed on stock exchanges. Their main objective is social welfare.

History

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Emergence of public sector banks

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The Central Government entered the banking business with the nationalization of the Imperial Bank of India in 1955. A 60% stake was taken by the Reserve Bank of India and the new bank was named State Bank of India. The seven other state banks became subsidiaries of the new bank in 1959 when the State Bank of India (Subsidiary Banks) Act, 1959 was passed by the Union government.[1]

The next major government intervention in banking took place on 19 July 1969 when the Indira government nationalised an additional 14 major banks. The total deposits in the banks nationalised in 1969 amounted to 50 crores. This move increased the presence of nationalised banks in India, with 84% of the total branches coming under government control.[2]

Before the economic liberalisation

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The share of the bank sector held by the public banks continued to grow through the 1980s, and by 1991 public sector banks accounted for 90% of the banking sector. A year later, in March, 1992, the combined total of branches held by public sector banks was 60,646 across India, and deposits accounted for ₹1,10,000 crore. The majority of these banks was profitable, with only one out of the 21 public sector banks reporting a loss.[3]

Liberalisation in the 2000s

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The nationalised banks reported a combined loss of ₹1160 crores. However, the early 2000s saw a reversal of this trend, such that in 2002-03 a profit of ₹7780 crores by the public sector banks: a trend that continued throughout the decade, with a ₹16856 crore profit in 2008–2009.[3]

Mergers

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The consolidation of SBI-associated banks started first by State Bank of India merging its subsidiary State Bank of Saurashtra with itself on 13 August 2008.[4] Thereafter it merged State Bank of Indore with itself on August 27, 2010.[5] The remaining subsidiaries, namely the State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore, and Bharatiya Mahila Bank were merged with State Bank of India with effect from 1 April 2017.

  • Vijaya Bank and Dena Bank were merged into Bank of Baroda in 2018.[6]
  • IDBI Bank was categorised as a private bank with effect from January 2019 on account of LIC acquiring the shares from GoI.[7]

On 30 August 2019, Minister of Finance Nirmala Sitharaman announced the government's plan for further consolidation of public sector banks. The mergers took effect from 1 April 2020.[8]

Public Sector Undertakings (Banks)

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Nationalized Banks (Government Shareholding %, as at end-June 2024)
  1. State Bank of India (57.54%)
  2. Punjab National Bank (70.08%)
  3. Bank of Baroda (63.97%)
  4. Canara Bank (62.93%)
  5. Union Bank of India (74.76%)
  6. Indian Bank (73.84%)
  7. Bank of India (73.38%)
  8. Central Bank of India (93.08%)
  9. Indian Overseas Bank (96.38%)
  10. UCO Bank (95.39%)
  11. Bank of Maharashtra (86.46%)
  12. Punjab and Sind Bank (98.25%)

Presently there are 43 Regional Rural Banks in India Since 1 April 2020.[9]

Andhra Pradesh

Arunachal Pradesh

  • Arunachal Pradesh Rural Bank

Assam

Bihar

Chhattisgarh

  • Chhattisgarh Rajya Gramin Bank

Gujarat

  • Baroda Gujarat Gramin Bank
  • Saurashtra Gramin Bank

Haryana

  • Sarva Haryana Gramin Bank

Himachal Pradesh

  • Himachal Pradesh Gramin Bank

Jammu and Kashmir

  • J&K Grameen Bank
  • Ellaquai Dehati Bank

Jharkhand

Karnataka

Kerala

Madhya Pradesh

Maharashtra

Manipur

  • Manipur Rural Bank

Meghalaya

  • Meghalaya Rural Bank

Mizoram

Nagaland

  • Nagaland Rural Bank

Odisha

Puducherry

Punjab

  • Punjab Gramin Bank

Rajasthan

  • Baroda Rajasthan Kshetriya Gramin Bank
  • Rajasthan Marudhara Gramin Bank

Tamil Nadu

Telangana

Tripura

Uttar Pradesh

Uttarakhand

West Bengal

See also

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References

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  1. ^ "Nationalisation of Banks in India". India Finance and Investment Guide. Indiamart. Archived from the original on 3 January 2014. Retrieved 29 March 2016.
  2. ^ Banerjee, Abhijit V.; Cole, Shawn; Duflo, Esther (2004). "Banking Reform in India". India Policy Forum (1). Retrieved 31 October 2011.
  3. ^ a b "Chapter 3: Public sector banks: an overview and identification of weak banks". 4 October 1999. Retrieved 31 October 2011.
  4. ^ Ray, Atmadip; Mehta, Sangita (26 August 2007), "State Bank of Saurashtra to be merged with SBI", The Economic Times
  5. ^ "State Bank of Indore merger with SBI to begin by Aug 26", The Economic Times, 28 July 2010
  6. ^ "10 public sector banks to be merged into four", Live Mint, 30 August 2019
  7. ^ "RBI categorises IDBI Bank as private sector lender". mint. 14 March 2019. Retrieved 24 July 2021.
  8. ^ Staff Writer (30 August 2019). "10 public sector banks to be merged into four". mint. Retrieved 24 July 2021.
  9. ^ "list of SCB".
  10. ^ a b Kumar, N. Ravi (10 May 2019). "Rural banks to be merged in TS, AP". The Hindu.
  11. ^ "दैनिक जागरण: बैंकों का विलय : एक हुए UP के तीन बैंक, अब बड़ौदा यूपी बैंक नाम से जाने जाएंगे".
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