{"id":6984,"date":"2022-07-26T00:00:00","date_gmt":"2022-07-26T00:00:00","guid":{"rendered":"https:\/\/www.nextias.com\/current_affairs\/uncategorized\/26-07-2022\/bank-nationalisation\/"},"modified":"2025-04-22T15:06:17","modified_gmt":"2025-04-22T09:36:17","slug":"bank-nationalisation","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/26-07-2022\/bank-nationalisation","title":{"rendered":"Bank Nationalisation"},"content":{"rendered":"\n<p><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>In News<\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">Recently, it was the <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>53rd anniversary<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> of Prime Minister Indira Gandhi nationalising 14 banks.<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>Background on <a href=\"https:\/\/www.nextias.com\/blog\/nationalisation-of-banks\/\">nationalisation of Banks<\/a><\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/_p85p-pC7lXZZcNmkzdOfGSGzcutI-KvP_xJ-RoO1qgYYzn9kY-d3kUr5C8q74G9IZTn30YgPLtnUzpDttBj-tFlt6zpD8tCLqQWzPVwmsC-Cfo0Tz7a4CnO2O1_3qIR9VrRuTqlZe_t8myC56atYjk\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u><\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>History<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: The Congress government had nationalised 14 banks in <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>1969 <\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">and then followed it up with nationalising another 6 in <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>1980.<\/strong><\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Nationalisation essentially meant<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> that the government took over the ownership of certain private banks.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Aim<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: The government\u2019s aim was to take away the control from a few private players and expand the banking coverage to rural India so that sectors such as agriculture and small industries could get better credit facilities, thus creating a new class of entrepreneurs.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Need?<\/strong><\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">India was predominantly an <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>agrarian economy<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> at that time with very <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>high levels of poverty<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> (over 50%) and <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>low levels of financial inclusion<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">Nationalisation was seen to be the <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>quick way<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> to ensure all the above objectives were met; private bankers would never have expanded for such <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>social development reasons<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">.\u00a0<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>Arguments against nationalisation of Banks<\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Less strategic and operating freedom<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: The key difference between the state-owned PSBs and private banks is that PSBs enjoy less strategic and operating freedom because of majority government ownership.<\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">The government <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>exercises significant control<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> over all aspects of PSB operations ranging from policies on recruitment and pay to investments and financing and bank governance including board and top management appointments.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Forced Loans<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: Public sector bank officials can be forced to extend loans when such loans don\u2019t make economic sense.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Rising NPAs<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: PSB officials come under the scrutiny of agencies such as the Central Vigilance Commission and the Comptroller Auditor General. This holds them back from taking risks in lending or in renegotiating bad debt due to fears of harassment from the same investigative agencies.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Lack of result<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: the central point of nationalising banks was to do what no right-thinking, profit-maximising private bank will do in the first place. If one appreciates this social or developmental objective of PSBs, the results were nothing short of transformative.<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>Arguments in favour of nationalisation of Banks<\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh3.googleusercontent.com\/hnBZpWzdlWgFDN8loW6DT6h4dokqoJQvtjecupVzP_TEdRotAQLeQ0lDd72ywPOZTmIjarIUbfyz6wNJy6OA5JdD8QqxHXXX4_AklAhhcqXxgeZV3PjsHGao7bxzqL3C1YLwrIL1SZLsJhUYgyXjSU4\" alt=\"\"\/><\/figure>\n\n\n\n<p><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u><\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Rural bank branches<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: The number of rural bank branches increased ten-fold from about 1,443 in 1969 to 15,105 in 1980 compared to a two-fold increase in urban and semi-urban areas from 5,248 to 13,300 branches.\u00a0<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Credit to rural areas:<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> credit to rural areas increased from Rs 115 crore to Rs 3,000 crore, a twenty-fold increase and deposits in rural areas increased from Rs 306 crore to Rs 5,939 crore, again a twenty-fold increase.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Credit to agriculture:<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> Between 1969 and 1980, credit to agriculture expanded forty-fold from Rs 67 crore to Rs 2,767 crore, reaching 13 percent of GDP from a starting point of 2 per cent.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Farmers<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: This growth represents a significant correction to the undersupply of credit to farmers that drove nationalisation. Both rural bank deposit mobilisation and rural credit increased significantly after the 1969 nationalisation.<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>Major Challenges faced by PSB\u2019s in today\u2019s world<\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>The financial position of public sector banks is fragile<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: partly masked by regulatory forbearance. The boards are disempowered, and the selection process for directors is increasingly compromised. Board governance is consequently weak.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Compared to private bank board discussions<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: PSB boards not only discussed fewer topics but also in much less detail.<\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">PSBs focussed less on factors such as profitability was one thing; the more surprising finding was that PSB boards even discussed development concerns (such as financial inclusion) far less than their private counterparts.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>NPAs<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: the recent government has had to repeatedly bail out one PSB after another as the NPAs rose to alarming proportions.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Burden on India\u2019s taxpayers<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: The government is just the medium; eventually losses of PSBs are paid for by India\u2019s taxpayers both current and future.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Drain on the public exchequer<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: on almost all metrics of efficiency and profitability, public sector banks lag far behind their private counterparts; in the process, they have become a drain on the public exchequer.<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>Significance of Privatisation<\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/42iDQDC33Tmdf6MXLYLtAtAmyHZ_zsxa0pzbviNr7nc9LPuhQIrpnEwBOV_zRLQlVRGh1zRJluelMONt4kBcAWWR6lkR65dkhbeEEfTAWdR70I0eQQ5tMJ1dJuVZ0AJzSA1PpDROGsU96Y4jfEhmGuE\" alt=\"\"\/><\/figure>\n\n\n\n<p><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u><\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Aggravated high Non-Performing Assets (NPAs)<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> and <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>stressed assets<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> amidst pandemic.\u00a0<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">To <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>strengthen the strong banks<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> and also <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>minimise their numbers through privatisation<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> to reduce its burden of support.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">Less effective bank mergers &amp; infuse <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>better management policies.<\/strong><\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>No political<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> interference &amp; prompt decision making.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>More profitability &amp; accountability <\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">to shareholders.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">Improves <\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>inflow of Foreign Direct Investment (FDI)<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> or investment.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">Recommended by<\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong> Narasimham Committee <\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">(<\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>proposed 33% govt. stakes<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">)<\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>, P J Nayak Committee <\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">(<\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">)<\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>,<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> RBI Working Group, etc.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Better use of technology<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"> by private banks.<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-size: 13pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong><u>Way forward<\/u><\/strong><\/span><\/span><\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Bonds<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: the current government has had to float bonds worth Rs 2.79 lakh crore to recapitalise public sector banks that is twice the amount of oil bonds that Congress-led UPA had floated. These recapitalisation bonds will be paid by the government until 2036.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Market to book ratio<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: When the Economic Survey reviewed bank nationalisation in 2020, it found that every rupee of taxpayer money invested in PSBs fetches a market value of just 71 paise. This is called the market to book ratio.<\/span><\/span><\/span>\n<ul class=\"wp-block-list\">\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Private Banks<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: Every rupee invested in new private sector banks fetches a market value of Rs 3.70. In other words, private banks give more than five times more value than PSBs.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>JAM Trinity<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: JAM stands for Jan-Dhan, Aadhaar and Mobile number. The starting point was the Jan-Dhan bank accounts, the idea that every Indian, especially the poor, should have a bank account, which can be leveraged to bring about greater financial inclusion.<\/span><\/span><\/span><\/li>\n\n\n\n<li><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Government policies<\/strong><\/span><\/span><\/span><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\">: The public sector banks are being unnecessarily demonised when the real culprit for wasting taxpayer\u2019s money is the government and its policy choices.<\/span><\/span><\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #000000;\"><strong>Source: <\/strong><\/span><\/span><\/span><a style=\"text-decoration: none;\" href=\"https:\/\/indianexpress.com\/article\/explained\/explainspeaking-nationalising-bank-masterstroke-policy-failure-8049647\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-size: 12pt;\"><span style=\"font-family: 'Book Antiqua',serif;\"><span style=\"color: #1155cc;\"><strong><u>IE<\/u><\/strong><\/span><\/span><\/span><\/a><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In News Background on nationalisation of Banks Arguments against nationalisation of Banks Arguments in favour of nationalisation of Banks Major Challenges faced by PSB\u2019s in today\u2019s world Significance of Privatisation Way forward Source: IE<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[26,46],"class_list":["post-6984","post","type-post","status-publish","format-standard","hentry","category-current-affairs","tag-gs-3","tag-indian-economy-related-issues"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/6984","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=6984"}],"version-history":[{"count":1,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/6984\/revisions"}],"predecessor-version":[{"id":41741,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/6984\/revisions\/41741"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=6984"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=6984"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=6984"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}