The period from 1950 to 1969 was crucial for the evolution and development of commercial banks worldwide, particularly in India. This era witnessed significant changes in the banking sector, with a focus on expanding banking services and promoting economic development.
1950-1969: A Transformative Era for Commercial Banks:
1. What were the key features of commercial banks during this period?
- Answer:
- Limited branch network.
- Concentration in urban areas.
- Limited focus on rural and agricultural finance.
- Restricted customer services.
2. What were the major challenges faced by the banking sector in India during this period?
- Answer:
- Lack of rural and agricultural banking.
- Limited access to banking services in rural areas.
- Inadequate credit facilities for small-scale industries and agriculture.
Key Developments:
3. What was the significance of the establishment of the State Bank of India (SBI) in 1955?
- Answer: The SBI’s formation marked the integration of numerous state banks and princely state banks into one entity, leading to a more significant national presence and enhanced banking services.
4. What role did the Industrial Finance Corporation of India (IFCI) play during this period?
- Answer: IFCI was established in 1948 and significantly contributed to industrial development by providing long-term loans and financial assistance to industries and businesses.
5. What was the objective of the Agricultural Refinance Corporation (ARC) created in 1963?
- Answer: ARC aimed to provide timely and adequate credit facilities to farmers and promote agricultural development.
Government Initiatives:
6. How did the government promote banking in rural areas during this period?
- Answer: The government initiated the Community Development Program (CDP) and the National Extension Service (NES) to encourage the establishment of rural branches and the provision of banking services in rural regions.
7. What was the importance of the Lead Bank Scheme introduced in 1969?
- Answer: The Lead Bank Scheme aimed to ensure the coordination of banking services in every district, with one bank acting as the lead bank. This helped in directing credit toward priority sectors and rural development.
Conclusion:
The period from 1950 to 1969 marked a significant phase in the evolution and development of commercial banks, particularly in India. Initiatives such as the formation of the State Bank of India, the establishment of specialized financial institutions, and government-led programs for rural and agricultural development played a crucial role in shaping the banking landscape during these years.
MCQs:
- What were the key features of commercial banks during the period from 1950 to 1969?
- a) Extensive rural branch network.
- b) Concentration in urban areas.
- c) Strong focus on agricultural finance.
- d) Comprehensive customer services.
- What was the significance of the establishment of the State Bank of India (SBI) in 1955?
- a) It marked the formation of cooperative banks.
- b) It led to the decentralization of banking services.
- c) It integrated multiple state banks and princely state banks into one entity.
- d) It focused solely on rural banking.
- What was the role of the Industrial Finance Corporation of India (IFCI) during this period?
- a) Promoting rural development.
- b) Providing long-term loans to industries.
- c) Offering credit facilities to farmers.
- d) Managing agricultural cooperatives.
- Which government initiative aimed to coordinate banking services at the district level and promote rural development?
- a) Nationalization of banks.
- b) Community Development Program (CDP).
- c) Industrial Finance Corporation of India (IFCI).
- d) Nationalization of insurance companies.