UP Board Solutions Class 10 Commerce Chapter 16 Nationalisation of Banks in India

Nationalisation Of Banks In India Objective Type Questions (1 Mark)

Question 1. The first bill favouring nationalisation of hank was presented on:
(a) 23rd August 1953
(b) 23rd August 1963
(c) 23rd August 1973
(d) 23rd August 1983
Answer: (b) 23rd August 1963
In simple words: The first legislative proposal for nationalizing banks was introduced in the Lok Sabha on August 23, 1963. This marked an early step in the government's move towards greater control over the banking sector.

🎯 Exam Tip: Remember specific dates and years for historical events like nationalization bills; they are often tested directly.

Question 2. The name of the lady who presented the first bill in favour of nationalisation was:
(a) Mrs Subhandra Joshi
(b) Mrs Jyoti Rani
(c) Mrs Soniya Gandhi
(d) None of these
Answer: (a) Mrs Subhandra Joshi
In simple words: Mrs. Subhadra Joshi was the pioneering figure who introduced the initial bill advocating for the nationalization of banks in India. Her effort was a significant political move towards reforming the banking system.

🎯 Exam Tip: Knowing key personalities associated with major economic policies can fetch easy marks in objective questions.

Question 3. The ordinance nationalising the bank was issued on .........
(a) 19th July 1996
(b) 19th July 1989
(c) 19th July 1969
(d) 19th July 1998
Answer: (c) 19th July 1969
In simple words: The official order to nationalize banks was promulgated on July 19, 1969. This ordinance was a landmark decision that brought several major commercial banks under government control.

🎯 Exam Tip: The date of the nationalization ordinance (19th July 1969) is a very important fact and frequently asked in exams.

Question 4. In the first instance ......... major banks were nationalised.
(a) 14
(b) 16
(c) 18
(d) 20
Answer: (a) 14
In simple words: Initially, fourteen large commercial banks were nationalized during the first phase of nationalization in India. This move aimed to align banking operations with national development goals.

🎯 Exam Tip: The number of banks nationalized in the first phase (14) is a direct factual question and should be memorized.

Question 5. The government nationalised 6 more banks through an ordinance dated .........
(a) 18th April 1970
(b) 19th April 1980
(c) 19th April 1970
(d) 18th April 1980
Answer: (d) 18th April 1980
In simple words: A second wave of bank nationalization occurred on April 18, 1980, when the government took control of six additional banks. This expanded the public sector's reach in the banking industry further.

🎯 Exam Tip: Distinguish between the two major phases of bank nationalization by their dates and the number of banks involved.

Question 6. Which of the following banks is a nationalised bank in India?
(a) Yes Bank
(b) Dena Bank
(c) Axis Bank
(d) None of these.
Answer: (b) Dena Bank
In simple words: Among the given options, Dena Bank was a nationalized bank in India, later merged with Bank of Baroda. Nationalized banks are those majority-owned by the government.

🎯 Exam Tip: Familiarize yourself with the list of nationalized banks and their current status (e.g., mergers) for accurate answers.

Nationalisation Of Banks In India Definite Answer Type Questions (1 Mark)

Question 1. When were 14 Banks nationalised in India?
Answer: 19th July 1969.
In simple words: Fourteen major commercial banks in India were nationalized on July 19, 1969. This event marked a significant turning point in India's banking history, shifting control from private hands to the government.

🎯 Exam Tip: This date is a cornerstone of India's economic history; ensure it is committed to memory for both objective and short-answer questions.

Question 2. What is the number of nationalised banks in India?
Answer: 14.
In simple words: Initially, 14 banks were nationalized in the first phase of this policy. This move significantly increased the public sector's share in the banking industry.

🎯 Exam Tip: Clearly state the exact number as requested; precision is key in factual questions.

Question 3. Which is the number of banks which ordinance issued by the President of India on 16th April 1980?
Answer: 6.
In simple words: Six more banks were nationalized by an ordinance issued by the President of India on April 16, 1980. This second round further consolidated government control over the banking sector.

🎯 Exam Tip: Differentiate between the first and second rounds of nationalization by the number of banks involved and their respective dates.

Nationalisation Of Banks In India Very Short Answer Type Questions (2 Marks)

Question 1. Write names of those banks which were nationalised in April 1980.
Answer:
1. Oriental Bank of Commerce
2. Vijaya Bank
3. Punjab and Sindh Bank
4. Corporation Bank
5. New Bank of India
6. Andhra Bank.
In simple words: In April 1980, six specific banks, including Oriental Bank of Commerce, Vijaya Bank, and Punjab and Sindh Bank, were brought under government ownership. This expansion of nationalization aimed to broaden financial inclusion and support economic development.

🎯 Exam Tip: Listing the exact names of the banks from the 1980 nationalization phase demonstrates thorough knowledge and earns full marks.

Question 2. Write names of those banks which were nationalised in 1969.
Answer:
1. Central Bank of India
2. Bank of India
3. Punjab National Bank
4. Bank of Baroda
5. United Commerical Bank
6. Canara Bank
7. United Bank of India
8. Dena Bank,
9. Union Bank of India
10. Allahabad Bank
11. Syndicate Bank
12. Indian Bank
13. Indian Overseas Bank
14. Bank of Maharashtra.
In simple words: Fourteen prominent banks, such as Central Bank of India, Bank of India, and Punjab National Bank, were nationalized in 1969. This was a monumental step to ensure that banking services were directed towards broader public welfare and economic growth, rather than just private profit.

🎯 Exam Tip: Be prepared to list at least 5-7 names of the 1969 nationalized banks as this question tests your factual recall of significant policy actions.

Question 3. Give any two advantages of Nationalised Banks.
Answer: Two advantages of nationalized banks are as follows:
(i) Inter-Bank competition can be ended: There is unnecessary competition among Indian Banks which benefits no one. If all the banks are nationalised, this necessary competition will automatically come to an end.
(ii) Development of Specialised Banks: There is at present acute shortage of agricultural, industrial and Indian Foreign Exchange banks in the country. If the entire banking industry is nationalised, the government will surely take steps to a developed specialised banking institution in the country.
In simple words: Nationalized banks help reduce unhealthy competition among financial institutions and promote the development of specialized banks catering to specific sectors like agriculture or foreign exchange. This ensures more structured and focused financial services across the nation.

🎯 Exam Tip: When asked for advantages, focus on benefits for the economy and public welfare, such as reduced competition and sector-specific financial development.

Question 4. Give any two disadvantages of nationalised banks.
Answer: Two disadvantages of nationalised banks are as follows:
(i) Violation of Financial Secrecy: The third argument against bank nationalisation is that it will violate the financial secrecy of individual depositors and of institutions.
(ii) Payment of Compensation: The Government will need substantial funds to compensate the shareholders of private banks if it decides to nationalise them. The amount needed by the Government is estimated to be around Rs. 100 crores.
In simple words: Disadvantages of nationalized banks include the potential breach of financial privacy for individual customers and the significant financial burden on the government to compensate private shareholders during the nationalization process. These issues raise concerns about trust and public expenditure.

🎯 Exam Tip: For disadvantages, highlight concerns related to privacy, financial costs to the government, and potential inefficiencies compared to private sector banks.

Question 5. Mention two main objectives of nationalisation of banks in India.
Answer:
1. To eliminate the concentration of economic power in few hands.
2. To extend banking facilities to unbanked rural Areas.
In simple words: The primary goals of bank nationalization were to prevent the concentration of economic power in a few private hands and to expand banking services to previously unbanked rural regions. This aimed to ensure more equitable distribution of credit and financial resources for national development.

🎯 Exam Tip: Focus on the socio-economic objectives like equitable distribution of wealth and financial inclusion when discussing the aims of nationalization.

Nationalisation Of Banks In India Short Answer Type Questions (4 Marks)

Question 1. What do you understand by the nationalisation of banks?
Answer: After independence, the people started thinking on the lines of nationalisation, for overcoming the problems and defects of the trade and industries. The banking institutions were one of them, which despite social control could not satisfy the needs of the people. The development of banks was very erratic and the Indian money market was not organised.
The Indian commercial banks did not open their branches in rural areas of provided loans only to big industrialist and businessmen. The really needy persons such as farmers, cottage and small industries, artisans etc. were deprived of this facility. Because of all these problems, the demand for nationalisation of banks became greater. The demand for nationalisation the banks was intensified, with the nationalisation of Imperial Bank.
In simple words: Bank nationalization refers to the process where the government takes ownership and control of private commercial banks. In India, this was done to address issues like uneven banking development, lack of credit for needy sectors like agriculture and small industries, and concentration of economic power in a few hands, aiming to align banking with national development goals.

🎯 Exam Tip: When defining nationalization, explain the concept and then elaborate on the historical context and the problems it aimed to solve in India.

Question 2. Give some arguments in favour of nationalisation of hanks.
Answer: The following arguments were advanced in favour on nationalisation:
(a) Balanced Growth of Banks: At present, the private banks operate only in those areas where they get good business, hence, generally all the banks are in towns and big cities. With the nationalisation of banks, the government will open the branches in those areas which do not have banking facilities. In this way, by nationalising the banks they would have balanced growth.
(b) Improvement of Efficiency: The Government banks in view of their vast resources are able to attract competent, trained and experienced staff more effectively than the private banks. Consequently, the level of operational efficiency is bound to be higher in Government banks in comparison to private banks.
(c) Utilisation of Bank Credit in National Interest: If the banks are allowed to be operated by private individuals, then the bank's credit shall not be used in the interests of the nation. On the contrary, the bank's credit will be utilised in the interests of these individuals who control the banks.
(d) Business Fluctuations can be checked: As is well known, a capitalist economy is all the time affected by business fluctuations. The slump and the boom follow each other at regular intervals. These fluctuations cause untold harm to the economy of the country. The government can keep effective control only if the banks are fully nationalised.
In simple words: Arguments for bank nationalization include ensuring balanced growth by extending banking to rural areas, potentially improving efficiency through government resources, directing credit towards national priorities rather than private profits, and enabling the government to control economic fluctuations more effectively. These points highlight the perceived benefits for broader economic stability and development.

🎯 Exam Tip: Provide distinct points, elaborating each with a clear explanation of how nationalization addresses an issue or brings a benefit. Focus on concepts like financial inclusion, resource allocation, and economic stability.

Question 3. Give some arguments against nationalisation of banks.
Answer: The following arguments were advanced against the nationalisation of banks:
(a) Fall in the efficiency of services: At present, the banks provide efficient services on a lower rate to customers due to the competition among the banks. After nationalization the banks would not be able to provide these kinds of facilities.
(b) Violation of Financial Secrecy: The third argument against bank nationalisation is that it will violate the financial secrecy of individual depositors and of institutions.
(c) Payment of compensation: The Government will need substantial funds to compensate the shareholders of private banks if it decides to nationalise them. The amount needed by the Government is estimated to be around Rs. 100 crores.
(d) Lack of Elasticity: The quality of elasticity is one of the important aspects of the banking system. With the nationalisation of banks, they will lose the quality of elasticity because they will have to take prior permission from his high officers before taking any decision.
In simple words: Arguments against bank nationalization include concerns about a decline in service efficiency due to reduced competition, potential violation of financial secrecy for depositors, and the substantial financial burden on the government to compensate private shareholders. Additionally, it can lead to a lack of operational flexibility or 'elasticity' as banks become more bureaucratic and require multiple approvals for decisions.

🎯 Exam Tip: When discussing disadvantages, focus on common criticisms like bureaucracy, lack of competition, privacy concerns, and the financial cost to the government. Use clear, concise language for each point.