Small scale and other priority sector advances also rose, resulting in the increase in the share of priority sector advances in total credit from 22 per cent in 1972 to as much as 45 per cent at the end of 1980s.
The stated purpose of bank nationalisation was to ensure that credit allocation occurs in accordance with plan priorities. The most major achievement of the banking industry in the 1970s and 1980s was a decisive shift in credit deployment in favour of the agricultural sector. The share of agricultural credit in total non-food credit also rose sharply from 2 per cent before nationalisation to 9 per cent in 1970-71 and close to 21 per cent in the mid 1980s, before falling to 17 per cent by the end of the 1980s.
We discuss the objectives and achievements of bank nationalisation in this episode of Money Matters with expert inputs from renowned economist Prabhat Patnaik, CH Venkatachalam, General Secretary, AIBEA, Thomas Franco, Former General Secretary, AIBOC.