Corporate Banking !?
The State Bank of India (SBI) was the first bank to be nationalized in India; it was on June 1955, under the SBI act of 1955. Following this move, on July 1960 seven more State banks of India (subsidiaries) were too nationalized. The SBI today is the leading bank nationally and is ranked among the best five banks worldwide. Later, on 1969, under the regime of Mrs. Gandhi 14 Indian banks were nationalized. Those banks by then were owned mostly by business men.
The need for nationalization drive was mainly felt because the banks then did not seem to be fulfilling the social goals and in providing the financial backup for the developmental goals of the nation. The nationalization met with mixed reaction across the nation both by political parties and the public alike.
Later on the new Economic policies of 1991, brought a sea change in every sector, and banking was no exception. The committee set up under the chairmanship of M.Narasimman worked on the liberalization of policies in the banking sectors, which allowed the non-Indian banks to enter into the country. Now the nation is flooded with foreign banks, holding their own pros and cons.
The nationalization drive never got a chance to prove its worth until 2007. The post globalized scenario made the world flat and tightly knitted countries together. The real estate boom in the US came into a sudden halt, triggering the second nightmare in financial history, The Great Recession of 2007. The recession in US infected the other financial markets worldwide. The financial crisis nearly brought the world to its knees. The interconnected share markets fell like a pack of dominos leaving millionaires bankrupt, in a day. The US took the worst hit and one of the main reasons pointed out for the crisis of such intensity was privatization in the banking sector. Many other countries, where finance flew via private banking sectors, also crumbled.
India, though not totally spared from the financial meltdown, relatively came over the crisis. One of the main reasons pointed out was the wise act of nationalization of banks.
The Reserve Bank of India, yesterday has said it has received as many as 26 applications from Conglomerates for new bank licenses. The list of the applicants can be viewed in the link seen below.
The winners among the applicants are likely to be announced by the first quarter of 2014. Corporate culture and lobbying are conjoined twins, the former is always followed by the later. It will really be a pressurizing task for the successor of Dr. D. Subbarao who is to retire soon. We have to wait until then and pray hard that no lobbyist akin to Nira Radia to come up, hitting the headlines in the years to come. God bless India.