As a first step towards nationalization of banks by the government of India, the State Bank of India (SBI) was nationalized under the SBI Act of 1955. Later, nationalization of seven State Banks of India (formed subsidiary) took place on 19th July, 1960. The State Banks of India is the largest commercial Bank in India and one of the top five Banks of India. It has 90 million customers and serves through a network of 9,000 branches in the country. Thereafter, in 1969, fourteen Banks were nationalized which were mostly owned and managed by businessmen and included the Central Bank of India, Punjab National Bank, Union Bank, Indian Overseas Bank, Bank of Maharashtra, etc. Nationalization of Banks had a significant economic, social and political impact in India. The Government intervention in the Banking System removed all suspicions from the minds of customers regarding the reliability of the bankers in the private sector. The nationalization of the Banks helped in the expansion of the Indian economy through infrastructure development. It created a huge employment base in the country. Despite such improvements, domination of the State upon Banks had a negative effect on the contribution of the banking sector, such as, absence of profitability, non-realization of its potential as a business, deterioration in service, etc.
