COMMERCIAL BANK

The term COMMERCIAL BANK refers to both scheduled and non-scheduled commercial banks which are regulated under the Banking Regulation Act, 1949. The scheduled banks are those which are included under the 2^nd Schedule of the Reserve Bank of India Act, 1934.

                                    COMMERCIAL BANK

Public Sector Bank                                                      Private Sector

State Bank     Other Nationalized Banks         Indian Banks   Foreign Bank     

SCHEDULED BANKS

Scheduled banks comprise Scheduled Commercial Banks and Scheduled Co-operative Banks. The Scheduled banks are further classified into: 1.Public Sector.

2. Private Sector
3. Domestic banks
4. Foreign Banks

           among the public sector banks, there are Nationalized Banks, State Bank Of India And Regional Rural Banks (RRBs). The scheduled banks are those which are included under the 2^nd Schedule of the Reserve Bank of India Act, 1934.

They Must satisfy two conditions under

                  THE RESERVE BANK OF INDIA ACT

1. Paid-Up Capital and reserves of an Aggregate Value of not less than Rs. 5 lakh.
2. It must satisfy RBI that its affairs are not conducted in a manner detrimental to the depositors.
3. The scheduled banks enjoy certain privileges like approaching RBI for financial assistance; refinance etc and correspondingly, they have certain obligations like maintaining certain cash reserves as prescribed by the RBI.

NON-SCHEDULED BANKS are those banks which are not included in the second schedule of the RBI Act as they do not comply with the above criteria. Local Area Banks are Non-scheduled Commercial Banks in India.

NATIONALIZATION OF BANKS

The growing need to bring poor and the lower income group into the formal banking sector to ensure financial inclusion and development. Hence some selected private banks were nationalised.

The objectives behind nationalisation were:

1. To break the ownership and control of banks by a few business families and thus to prevent the concentration of wealth and economic power.
2. To make banks into a part of socio-economic planning
3. To extend banks to rural and unbanked areas.
4. To mobilize savings from masses from all parts of the country.
5. To cater to the needs of the priority sector like weaker sections and poverty alleviation, agriculture, MSMEs etc.

Government of India nationalized THE IMPERIAL BANK OF INDIA IN 1955 and the new bank was named as THE STATE BANK OF INDIA. The next major nationalisation of banks took place in 1969 when the government of India nationalised an additional 14 major banks under Banking Nationalization act, 1969. The next round of nationalisation took place in 1980. The government nationalized six banks.

1. 14 banks with deposits of more than 50 Crore were nationalized in 1969
2. 6 banks with deposits were more than 200 Crore were nationalized in 1980.

STATE BANK OF INDIA

The government of India, enacted the SBI act 1955 partially nationalised the three Imperial banks (of the three presidencies). Hence the SBI was the first public sector bank of India. Eight more private banks were nationalised as SBI associates banks. Later the State bank of Bikaner and Jaipur was created by merging.

In 2017 SBI was merged with 5 of its associate banks and Bhartiya Mahila bank. In 2018 it was merged with Bank Of Baroda With Vijaya Bank And Dena Bank.

PUNJAB NATIONAL BANK

Punjab National Bank, abbreviated as PNB, is banking and financial service bank owned by the Government of India with its headquarters is in New Delhi, India. The bank was founded in 1894 and is the second Largest Public Sector Bank (PSB) in India, both in terms of business and its network. It was the First Swadeshi Bank set up with the spirit of nationalism and the first bank purely managed by Indians and Indian capital.

It was nationalised in 1069 along with other banks. It has an International branch in UK. Recently it was merged with Oriental Branch of Commerce and Union Bank.

OTHER NATIONALIZED BANKS

The New Bank of India was merged with Punjab National Bank in 1993. Then the total number of nationalised bank came to 19. In 2020, there were 18 public sector banks in India. The government is recently going for bank mergers and amalgamation of PSBs.

BANK MERGER

The government is going for merger of large PSB in order to improve its efficiency and reduce the NPA crisis. 10 PSB has been merged into 4 paving the way for the largest consolidation among state owned banks.

1. PUNJAB NATIONAL BANK will take over ORIENTAL BANK OF COMMERCE and UNION BANK.
2. CANARA BANK will take over Syndicate bank.
3. UNION BANK OF INDIA will take over Andhra Bank and Cooperation bank.
4. Indian bank will be merged with Allahabad bank.

     After the mergers now the total PSB are 12:

1. State bank of India
2. Punjab National Bank
3. Bank Of Baroda
4. Canara Bank
5. Union Bank Of India
6. Indian Bank
7. Bank Of Maharashtra
8. Punjab And Sindh Bank
9. Indian Overseas Bank
10. United Commercial Bank
11. Central Bank Of India
12. Bank Of India