Letters: Banking on facts

In his otherwise very informative article "Calling PSU banks to account" (August 5) Rajiv Lall has oversimplified the history of government ownership of banks, by implying that the nationalisation of the Imperial Bank of India in 1955 and of the 14 private banks in 1969, was a part of the same process. More than 14 years apart, the background of the two events was altogether different. The Imperial Bank was nationalised after a six-year-long debate in which two high-level committees - the Rural Banking Enquiry Committee, 1949 and All-India Rural Credit Survey Committee, 1952 - and several top economic and banking experts of the country were involved. The bank nationalisation of 1969 was an overnight decision of a single individual (incidentally, a non-expert on the subject) against the expert advice of the then Reserve Bank of India Governor L K Jha, and that too without any rationale. The only reason for the decision, narrated to a friend years later by the august personality who took it was: "They (my political adversaries) drove me to the wall and left me with no other option," (vide RBI History Vol 3 p.53).

R C Mody New Delhi

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