The question asks for the primary objective behind the nationalisation of banks in India. To answer this, we need to recall the historical context and stated goals of bank nationalisation, particularly the waves in 1969 and 1980.
D) To expand banking to rural areas and channel credit to priority sectors
This was indeed the primary objective. The nationalisation of banks in 1969 (and subsequently in 1980) was a major policy decision aimed at achieving social control over banking. The main goals were to ensure that credit was made available to neglected sectors like agriculture and small-scale industries, and to promote banking habits and financial inclusion in rural and semi-urban areas, thereby fostering balanced regional development.
The question asks for the year in which the Reserve Bank of India (RBI) was nationalised. This is a factual question related to the history of India's central banking institution. To answer correctly, one needs to recall the key dates associated with the RBI's establishment and nationalisation.
Correct Option: B) 1949. The Reserve Bank of India was nationalised on January 1, 1949, making it a state-owned institution.
The question asks about the legislation that replaced the 1969 ordinance related to bank nationalization after it was struck down by the Supreme Court. This requires knowledge of the historical context of bank nationalization in India and the legal challenges associated with it.
B) Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 is the correct answer. This Act was specifically passed to re-nationalize the 14 banks after the Supreme Court struck down the 1969 ordinance.
The question asks about the share of total bank deposits held by the 14 nationalized banks in India in 1969. This is a factual question related to the history of banking in India, specifically the impact of bank nationalization.
Correct Option: B) About 85 per cent
The nationalization of 14 major commercial banks on July 19, 1969, was a landmark event in India's economic history. These banks collectively accounted for approximately 85% of the total bank deposits in the country, giving the government substantial control over the banking sector and credit flow.
The question asks about a scheme that was strengthened after bank nationalisation to direct credit to agriculture and small industries. This points to a policy measure specifically designed to achieve social banking objectives.
C) Priority Sector Lending — After bank nationalisation, the concept of Priority Sector Lending (PSL) was significantly strengthened. Under PSL, commercial banks are mandated to lend a certain percentage of their total credit to specific sectors identified as priorities for national development, such as agriculture, micro, small, and medium enterprises (MSMEs), education, housing, and social infrastructure. This directly aligns with the objective of directing credit to agriculture and small industries post-nationalisation.
The question asks to identify the committee responsible for recommending reforms in the Indian banking sector during the 1990s. This requires knowledge of key economic committees and their mandates in India's post-liberalization era.
Correct Option: A) Narasimham Committee
The Narasimham Committee, chaired by M. Narasimham, was indeed formed in 1991 to recommend reforms in the Indian banking and financial sector. Its recommendations were crucial for the liberalization and modernization of the Indian financial system in the 1990s. Key recommendations included reduction in Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR), deregulation of interest rates, establishment of Asset Reconstruction Funds (ARFs), and reforms in the banking structure.