Answer to Question #200146 in Management for Peter Masih

Question

indian banking has witnessed major changes starting from nationalization in 1969 of 14

private sector banks again to privatization of banks in 1990s. year 2014 resulted in

setting of small payment banks in different nooks & corners of the country to a

diametrically opposite step of mergers and consolidation of many weak public sector tor banks with a few large banks in 2018/19. What has been the economic & financial

compulsions/reasons for such changes in five decades? (10 Marks)

Answer 1

Within a decade, India's succession of banking reforms resulted in a slew of economic problems, including large loans, double-digit inflation, and so on. As a result, reforms were implemented in order to enhance India's economy by achieving the following goals: First, the adjustments were made to improve the performance of the entire banking sector in the country by implementing a structural framework. The modifications were also intended to make Indian banks more competitive on a global scale. Another economic motive for the modifications was the development of all Indian banks' stability and efficiency.