Write a short note on Nationalizationof banks and abolition of privy
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Explanation:
One of the most crucial evolutions which led to the foundation of current Banking system in India was the Nationalization of Banks in 1969. Subsequently, in 1980 six more private banks were nationalized. The Supreme Court in the case of All India Bank Officers’ Confederation v. Union of India[1], remarked that the object of Banking Companies (Acquisition and Transfer of Undertakings) Act was to nationalize the banks to render the largest good to the largest number of people. The object of Section 9 of the Act which is regarding Central Government’s power to make a scheme for constitution of Board of Directors, is to give the Board a truly representative character so as to reflect the genuine interests of the various persons manning or dealing with the bank as an industry and a commercial enterprise.
Some of the benefits of nationalization of banks were spreading of branch network of banks throughout the nation including the rural areas, wide deployment of credit across the country, increased mobilization of resources.