50 years on, right question to ask about bank nationalisation is what next

Private banks are about to outpace the state-owned ones, but the government's job should be to deliver a financial sector where health is not determined by ownership, writes T N Ninan.

Half a century after the nationalisation of 14 banks (all those with deposits in 1969 of more than Rs 50 crore), many commentators have been debating whether it was a good or bad thing that Indira Gandhi did. That’s the wrong question, but its short answer is that it was both good and bad. It helped spread the banks’ footprint and boosted the national savings rate, but it has cost the taxpayer a pretty penny because of these banks’ constant need for fresh capital. Nor is Mrs Gandhi’s motive behind nationalisation a relevant question waiting to be settled. Everyone knows