India, July 27 -- The nationalisation of the 14 largest commercial banks on July 19, 1969, by the then Indira Gandhi Government, was the most significant decision, which has had wide implications across the economy even 50 years later. These 14 banks accounted for 85 per cent of the bank deposits in the country. Nationalisation was done to free up the banks from the hands of a few industrial houses, who tried to use the depositors' money under their control to increase credit flow and thereafter address the rank neglect of rural and agricultural sectors, which were starved of funds.

Circumstances leading to nationalisation

Recognising the need to improve the flow of credit in rural areas as also the agricultural sector, the then Governm...