Difference between public sector bank and nationalized bank in hindi
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What is difference between public sector bank and nationalised bank?
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Jayaraman Raju, former Banking IT Consultant
Answered Jan 17, 2018 · Author has 1.4kanswers and 3.7m answer views
Originally Answered: What is the difference between nationalize banks and public sector banks?
I think such queries have been answered on this blog by many esteemed contributor
Public Sector Banks (PSBs) are those banks where a majority stake (i.e. more than 50%) is held by the government.
The shares of these banks are listed on stock exchanges.
There are a total of 21 PSBs in India.
Coming to the Nationalised Banks, these are the banks which have been specifically brought under the government control through a legislation;
By the early 1960s, the Government of India realized that a significant share of deposits coming from the masses of India was controlled by 14 privately owned commercial banks.
Indian agriculture and industries were booming and the need for finance was high.
Financial regulations were also very important at that time since those would help shape the nature of the country’s economy for decades to come;
Accordingly, the government promulgated an ordinance - the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969 - thereby nationalising all the 14 banks that were under consideration with effect from the midnight of 19 July 1969.
And in 1980, the government, initiated the second spate of bank nationalization.
This time about six banks were nationalised and the Government of India controlled over 90 percent of the banking business in the country. Of the 20 banks that were nationalised,
New Bank of India was later (in 1993) merged with Punjab National Bank.
Thus we have 19 nationalised banks in our country;
If we compare the two lists — the list of nationalised banks and the PSBs, we observe that we have more banks owned by the govt then the nationalised banks; They are SBI and IDBI ; While SBI was the Imperial Bank of India, before it was taken over by the government and IDBI Industrial Development bank of India (IDBI) was constituted under Industrial Development bank of India Act, 1964 as a Development Financial Institution and came into being as on July 01, 1964 vide GoI notification dated June 22, 1964. It was regarded as a Public Financial Institution in terms of the provisions of Section 4A of the Companies Act, 1956. It continued to serve as a DFI for 40 years till the year 2004 when it was transformed into a Bank.
Industrial Development Bank of India Limited
In response to the felt need and on commercial prudence, it was decided to transform IDBI into a Bank. For the purpose, Industrial Development bank (transfer of undertaking and Repeal) Act, 2003 [Repeal Act] was passed repealing the Industrial Development Bank of India Act, 1964. In terms of the provisions of the Repeal Act, a new company under the name of Industrial Development Bank of India Limited (IDBI Ltd.) was incorporated as a Govt. Company under the Companies Act, 1956 on September 27, 2004. Thereafter, the undertaking of IDBI was transferred to and vested in IDBI Ltd. with effect from the effective date of October 01, 2004. In terms of the provisions of the Repeal Act, IDBI Ltd. has been functioning as a Bank in addition to its earlier role of a Financial Institution.
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21 ANSWERS

Jayaraman Raju, former Banking IT Consultant
Answered Jan 17, 2018 · Author has 1.4kanswers and 3.7m answer views
Originally Answered: What is the difference between nationalize banks and public sector banks?
I think such queries have been answered on this blog by many esteemed contributor
Public Sector Banks (PSBs) are those banks where a majority stake (i.e. more than 50%) is held by the government.
The shares of these banks are listed on stock exchanges.
There are a total of 21 PSBs in India.
Coming to the Nationalised Banks, these are the banks which have been specifically brought under the government control through a legislation;
By the early 1960s, the Government of India realized that a significant share of deposits coming from the masses of India was controlled by 14 privately owned commercial banks.
Indian agriculture and industries were booming and the need for finance was high.
Financial regulations were also very important at that time since those would help shape the nature of the country’s economy for decades to come;
Accordingly, the government promulgated an ordinance - the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969 - thereby nationalising all the 14 banks that were under consideration with effect from the midnight of 19 July 1969.
And in 1980, the government, initiated the second spate of bank nationalization.
This time about six banks were nationalised and the Government of India controlled over 90 percent of the banking business in the country. Of the 20 banks that were nationalised,
New Bank of India was later (in 1993) merged with Punjab National Bank.
Thus we have 19 nationalised banks in our country;
If we compare the two lists — the list of nationalised banks and the PSBs, we observe that we have more banks owned by the govt then the nationalised banks; They are SBI and IDBI ; While SBI was the Imperial Bank of India, before it was taken over by the government and IDBI Industrial Development bank of India (IDBI) was constituted under Industrial Development bank of India Act, 1964 as a Development Financial Institution and came into being as on July 01, 1964 vide GoI notification dated June 22, 1964. It was regarded as a Public Financial Institution in terms of the provisions of Section 4A of the Companies Act, 1956. It continued to serve as a DFI for 40 years till the year 2004 when it was transformed into a Bank.
Industrial Development Bank of India Limited
In response to the felt need and on commercial prudence, it was decided to transform IDBI into a Bank. For the purpose, Industrial Development bank (transfer of undertaking and Repeal) Act, 2003 [Repeal Act] was passed repealing the Industrial Development Bank of India Act, 1964. In terms of the provisions of the Repeal Act, a new company under the name of Industrial Development Bank of India Limited (IDBI Ltd.) was incorporated as a Govt. Company under the Companies Act, 1956 on September 27, 2004. Thereafter, the undertaking of IDBI was transferred to and vested in IDBI Ltd. with effect from the effective date of October 01, 2004. In terms of the provisions of the Repeal Act, IDBI Ltd. has been functioning as a Bank in addition to its earlier role of a Financial Institution.
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