DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : P. Samba Murthy,
Designation : Head of Department

Branch : D.C.C.P.
Institute : S.R.R.S. Govt. Polytechnic,
Sircilla, Karimnagar District
Year/Semester : V Semester
Subject : Banking – I
Subject Code : CCP- 504(B)
Topic : Indian Banking Industry – Growth
Duration : 50 Minutes
Sub-Topic : Achievements of Goals of
Nationalization in respect of
Branches
Teaching Aids : PPT CCP504(B).22 1
Objectives
On completion of this period, you would be
able to
 Understand the achievements of goals of
nationalization of banks in respect of Branches.

CCP504(B).22 2
Recap

So far We have Discussed

 The Objectives of Nationalization
 The Criticism on Nationalization
 The answer to the Criticism

CCP504(B).22 3
Introduction
 The commercial banking system in India has
improved and progressed appreciably after bank
nationalization in 1969.
 To bring about rapid development of banking
facilities in the rural areas and unbanked centers,
certain achievements of banks like expansion of
banks in the post-nationalization period are made
which can now be discussed.

CCP504(B).22 4
Branch Expansion

 The progress recorded in the expansion of branch

network of commercial banks since nationalization
was commendable.
 It is no exaggeration to say that the order of
expansion has no parallel anywhere in the world.

CCP504(B).22 5
Branch Expansion
 The lead bank scheme has played an important role
. in the bank expansion programme.

 The number of branches of all scheduled

commercial banks were increased about 100%
during the 18 years of pre-nationalization period
(1951-1969).

 It has further gone up 522% during the post-

nationalization period (1969-87).
CCP504(B).22 6
Branch Expansion

 The banking coverage in the country as a whole

has also considerably improved from one bank
for 87 thousand people in 1951….
 …to one bank for 16 thousand people in June,
2003
 The number of bank branches in June,2002
were 66,514.

CCP504(B).22 7
Coverage of Rural Area
 The main thrust of branch expansion policy in the
post-nationalization period has been on increasing
the banking facilities in the rural areas.
 There had been a significant increase in the rural
branches of banks since 1969.

CCP504(B).22 8
Coverage of Rural Area

 The number of branches in rural areas having

population up to 10,000 has increased from 1832 in
June, 1969 to 32,709 in June, 2000.
 The percentage of bank branches in rural areas to
the total branches has risen from 22.2% in June,
1969 to 59.2 in June, 2000.

CCP504(B).22 9
Reduction of Regional Imbalances

 Another highlight of the branch expansion policy

since the nationalization of banks has been to
extend banking facilities in the deficit and un-
banked areas to reduce the regional imbalances.

CCP504(B).22 10
Reduction of Regional Imbalances

 Systematic efforts are being made to increase

banking facilities in the rural and semi-urban areas of the
deficit districts of the country.
 The licensing policy during the Seventh Plan period
(1985-90) aims at achieving a coverage of
17,000population per bank in rural and semi-urban areas
of each development block.

CCP504(B).22 11
Reduction of Regional Imbalances

 The number of branches in rural areas having

population up to 10,000 has increased from 1832
in June, 1969 to 32,709 in June, 2000.
 The percentage of bank branches in rural areas to
the total branches has risen from 22.2% in June,
1969 to 59.2 in June, 2000.

CCP504(B).22 12
Reduction of Regional Imbalances

 The policy also aims at providing a bank office

within ten kilometers each village

CCP504(B).22 13
Summary
 Rapid economic development pre-supposes rapid
expansion of commercial banks.
 Initially, the banks were conservative and opened
branches mainly in metropolitan cities and other
major cities.
 Branch expansion gained momentum after
nationalization of major commercial banks and the
introduction of the Lead Bank Scheme.

CCP504(B).22 14
Frequently asked questions:

1) Briefly explain the development of banking

expansion after nationalization of banks

CCP504(B).22 15