Nationalisation of Banks
India has adopted the socialistic pattern of society. This does not mean the ownership of the means of production by the states. This pattern imposes on us a moral obligation to bring the strategic areas of cur economy under state ownership and control. The Government has also to take steps that our political democracy is not corroded by economic instability Having this in view, the banks were nationalized.
Banks play a very important role in the nation’s economy. Banks can be an easy source of credit to millions of farmers, artisans and other self-employed persons. Hence the banks which deaf with the lives of millions of people should have a larger social purpose. Major banks should be not only socially controlled that publicly owned.
Nationalisation of banks will eliminate the use of bank credit for speculative and unproductive purposes. The bank will extend their credit to the priority areas, agriculture, small industries and new entrepreneurs.
Nationalisation will help more equitable distribution of credit throughout the country. The banks if they were controlled by traders who had their own business interests, is compelled to provide them with easy money and the resultant power to exploit. After nationalisation, bank credit is to be channelised according to the priority fixed by the planning commission.
It will not possible for the banks after nationalisation to indulge in unhealthy competition among themselves. They cannot have their own way.
It is said that the party in power will have easy access to public money especially during elections but this cannot be accepted for it is more convenient to exploit private banks than the nationalised ones.
Another criticism is that nationalisation may lead to inefficiency. This is advanced against all projects sponsored by the Government. Efficiency of any institution depends upon effective administration and it has nothing to do with private ownership or nationalisation. If the administration is efficient, the banks will function as -smoothly as they were before.
The favouritism and nepotism in the appointments to the banks have been overcome by the constitution of regional boards for recruitment of employees to their regions.
Nationalisation is an important step in the national economy and it is just a part of the larger programme of the Government. In fact, it is a significant step towards economic progress. There are many programmes to be implemented for utilising the banking system for the social and national welfare.
