Nationalised banks

The history of nationalization of Indian banks dates back to the year 1955 when the Imperial
Bank of India was nationalized and re-christened as State Bank of India (under the SBI Act,
1955). Later on July 19, 1960, the 7 subsidiaries of SBI viz. State Bank of Hyderabad (SBH),
State Bank of Indore, State Bank of Saurashtra (SBS), State Bank of Mysore (SBM), State Bank
of Bikaner and Jaipur (SBBJ), State Bank of Patiala (SBP), and State Bank of Travancore (SBT)
were also nationalized with deposits more than 200 crores. 
The Initiative
The banking industry in India became a major tool for the development of country's economy by
the 1960. The industry also became a large employer creating a number of opportunities for the
job-seekers. In order to spread banking infrastructure in rural areas, the then Prime Minister,
Indira Gandhi took the initiative to nationalize some commercial banks. She submitted a paper
“Stray thoughts on Bank Nationalisation’ in the All India Congress Meeting, which got positive
feedback. On July 19, 1969, 14 commercial banks were nationalized, which got presidential
approval on August 9, 1969.

In 1980, in order to provide government more power and command over credit delivery, six
more commercial banks in India were nationalized. In 1993, New Bank of India merged with
Punjab National Bank (PNB), which brought the number of nationalized banks in India to 19. It's
also the only merger between two Indian nationalized banks. In the following years, the
nationalized banks in India saw a growth rate of around 4%, which was close to average growth
rate of country's economy.
List of Nationalised Banks in India
Following is the list of Nationalised Banks in India:

1. Allahabad Bank
2. Andhra Bank
3. Bank of Baroda
4. Bank of India
5. Bank of Maharashtra
6. Canara Bank
7. Central Bank of India
8. Corporation Bank
9. Dena Bank
10. Indian Bank
11. Indian Overseas Bank
12. Oriental Bank of Commerce
 13. Punjab & Sind Bank

14. Punjab National Bank

15. Syndicate Bank
16. UCO Bank
17. Union Bank of India
18. United Bank of India
19. Vijaya Bank

Global Banking Industry

The world of commercial banking is undergoing a deep transformation
as a result of marketable instruments competing with loans
and demand deposits. Because of this strong competition, commercial
banks are struggling to make acceptable margins from their traditional
business entering into investment banking.
Increasing competition has forced banks to search for more income
at the expense of more risk. Banks that lent heavily to Asia in search of
better returns than those available in Western markets are now being
blamed for bad credit decisions. The Asian crisis has renewed interest on
credit risk management casting doubts on the effectiveness of current
credit regulations. Technological changes have also heightened competition
by making it easier to imitate bank services. The traditional advantage
of physical proximity to clients given by extended networks of
branches has vanished. Banks have to compete with money market mutual
funds for deposit business, commercial papers, and medium-term
notes for bank loans.
As margins are squeezed, commercial banks in the United States and
Europe have been forced to cut costs and branches while diversifying
into pensions, insurance, asset management, and investment banking.
In the United States, many banks call themselves financial service companies
even in their reported financial statements. Diversification, however,
has not always proved to be an effective strategy, and many banks
have had to revert to a concentrated business. These examples illustrate
how commercial banks are reinventing themselves, not just once but
many times. All these changes are creating an identity crisis for oldfashioned
bankers, leading to the key question, “What is a bank today?”
The question is difficult, but evidence suggests that the concept of banking
is being modified and the traditional barriers among financial service
subindustries (retail banking, private banking, investment banking, asset
management, insurance, etc.) are vanishing.
Illustrating what an entity does or serves for often is a useful way to
define it. The identity crisis of banks—especially commercial banks—
stems from the deep and rapid changes in their traditional body of activities
(particularly retail and corporate banking). On the other hand, investment
banking, private banking, and bancassurance are the most
profitable and fastest growing segments of the financial service industry.
As banks undertake new activities, they also incur new risks. Since
boundaries among subindustries are weakening, if not vanishing, banks—
like all other financial service companies—must redefine themselves in
terms of the products they offer and the customers they serve. The way
banks pursue this redefinition is through a strategic repositioning in the
financial service industry. All these factors represent a new challenge for
commercial banks, provided this definition still has a unique meaning. Increased
competition, diversification, new products, and new geographic
markets mean that both the spectrum of risks and the risk profile for
banks are dramatically changing. Not only have the risk parameters
broadened, they have also changed: banks now face unfamiliar types of
risk. In addition to the traditional credit risk, financial risk1 has risen and
is now playing a crucial role. Banks thus need integrated risk management
techniques that can measure and manage market risk in a timely and
effective manner. In this chapter, we brief ly review the main trends that
are affecting the global banking industry, underlining the effects of each
of these changes on the risk profile of banks.