BANKING AFFAIRS

Detailed explanation-1: -As mentioned above, an important rationale for the Indian bank nationalizations was to direct credit towards sectors the government thought were underserved, including small scale industry, as well as agriculture and backward areas.

Detailed explanation-2: -Why was nationalisation of banks required? Nationalisation of banks was implemented under the Banking Companies (Acquisition and Transfer of Undertakings) Act of 1970. The ordinance came into force on 19 July 1969, “ to serve better the needs of development of the economy in conformity with national policy objectives."

Detailed explanation-3: -The correct answer is Improving credit facility. The nationalization of banks means taking over the ownership and management of commercial banks by the government. Objectives of nationalisation of banks: To generate public confidence in banking system of the country.

Detailed explanation-4: -Credit control is used to control the demand and supply of money. The credit-control system is utilised by the Reserve Bank of India to ensure the long-term development of the Indian economy. Controlling credit helps the RBI and the government achieve economic growth while also keeping inflation under control.

Detailed explanation-5: -After becoming Prime Minister, Gandhi expressed the intention of nationalising the banks in a paper titled, “Stray thoughts on Bank Nationalisation” in order to alleviate poverty. The paper received the overwhelming support of the public. In 1969, Gandhi moved to nationalise fourteen major commercial banks.