Question

Explain the objectives of nationalization of commercial banks.

Answer 1

1. The main objective of nationalization was to attain social welfare. Sectors such as agriculture, small and village industries were in need of funds for their expansion and further economic development.
2. It helped to curb private monopolies in order to ensure a smooth supply of credit to socially desirable sections.
3. To encourage the banking habit among the rural population.
4. To reduce the regional imbalances where the banking facilities were not available.
5. After nationalization, new bank branches were opened in both rural and urban areas, and they created credit facilities mainly for the agriculture sector and its allied activities.