SBI PO Exam 2015- Descriptive Essay Writing on the topic: Nationalization of Banks– has it anyway helped Indian Economy?
Model Descriptive- Essay Writing on the topic of Nationalization of Banks, has it anyway helped Indian Economy, was given here. Candidates those who are preparing for SBI PO Exam 2015 can use this material.
Nationalization of Banks– has it anyway helped Indian Economy?
Nationalization, which is of course a socialist policy, has been pursued in India by the ruling congress party as its objective has been establishment of a socialistic pattern of society in India. For over two decades, control over the commanding heights of the economy was considered necessary. Particularly in a poor country where it is extremely difficult to mobilize adequate resources for development, it was necessary to reduce inequalities between different regions and groups. The result was nationalization of banking industry in July 1969. In 1969, 14 major banks which held deposits exceeding Rs. 50 crores and in 1980, 6 more banks which held deposits exceeding Rs. 200 crores were nationalized.
The main objective of bank nationalization have been removal of control by a few, provision of adequate credit for agriculture, small scale industries and exports, encouragement of new classes of entrepreneurs and giving a professional bent to the bank management.
After nationalization the credit policy of the banks has undergone a major change. Wide ranging systems of guarantees required by the banks before nationalization for financing trade, small business, minor repair industries, small farming and self-employed sectors have been maintaining a closer touch with state Governments in order to get the best out of the monetary system for the good of the public without departing from sound principles of prudent financing. In lending against stocks and commodities, the banks are asked to be vigilant and ensure that allocation for cornering of shares or goods in short supplies do not arise. Representation has been given on the board of director of the nationalized banks to small scale industrialists, workers, farmers and bank employees.
Nationalization of banks has placed thousands of crores of rupees at the disposal of the Government as additional resources. A substantial part of this can be used to develop the requisite banking infrastructure to make credit easily available for export purposes. Many banks have created export cells, small scale industry advisory panels and opportunities have been offered to unemployed technical graduates to get self-employed by giving not only financial but also technical aid. The lead bank system after nationalization has done wonderful service to agriculture, small industries and other priority sectors.
Banking industry has created a lot of employment opportunities. Infact ’a Bank Job’ has become an ambition of almost all the youth in India. A Bank employee is an envy of everyone’s eyes.
However, the move for the nationalization of banks is not free criticism. Except for politico-ideological consideration there was hardly any justification when social control of banks was working satisfactorily. More over the Reserve Bank of India started securing enormous to serve the purpose of nationalization of banks. The charge that private banks did not show enough social awareness in making credit allocation was not sound, as the gap was filled with the setting up of the National Credit Council. It is presumed that the resources are available for the Government after nationalization; the private sector will definitely suffer from the lack of additional financial resource. Imprudent expansion of credit facilities by nationalized banks may adversely affect the interests of the depositors. Naturally the Nationalization of greater activity in mobilizing deposits. All the above deterioration of services and erosion of profitability is much felt. Despite the above demerits, the nationalization of banks has brought more good to the needy Indian public.
The deterioration of services has touched a rock bottom. One fine morning we may reach a stage at which without paying something it may not be possible to encash a cheque. The following remedial measures may be taken to solve the malady. A portion of the capital can be privatized and by retaining the major share the Government can have its hold. Involving the pate Entrepreneur to manage the day-to-day affairs of Public Sector undertakings while the overall supervision can be undertaken by Government.