OLD GENERATION PRIVATE SECTOR BANKS-A CASE FOR NATIONALISATION

THE SOCIAL CONTROL FOLLOWED BY NATIONALISATION OF BANKS IN 1969 HAD BROUGHT OUT GOOD CHANGE IN ECONOMY. TO IMPROVE UPON THE NOW WE ARE GOING FOR FINANCIAL INCLUSION. THE NEW GENERATION PRIVATE SECTOR BANKS MAILY CONCENTRATE ON HIGHEND AND HIGH MIDDLE INCOME SEGMENTS BUT FOR SYMBOLIC SHOWs. BUT NATIONALISED BANKS GO FOR LOW INCOME AND MID INCOME SEGMENT.UNLIKE THE NEW GENERATION PRIVATE SECTOR BANKS WHICH RELY ON INDIRECT FINANCING TO ACCOMPLISH THE PRIORITY SECTOR TARGETS, THE ESTABLISHED PRIVATE SECTOR BANKS(OLD GENERATION PRIVATE SECTOR BANKS) ALSO FUNCTIONED ALMOST IN LINE WITH NATIONALISED BANKS. HENCE THEIR PENETRATION POWER AMONG PEOPLE OF LOW/MID INCOME SEGMENT IS MORE THAN NEW GENERATION PRIVATE SECTOR BANKS. THE GOVERNMENT OPENING UP THE BANKING SECTOR FOR PRIVATE PLAYERS ESPECIALLY DELIMITING VOTING RIGHTS OF FOREIGN INVESTORS WILL HAVE SERIOUS OWNERSHIP AND FUNCTIONAL IMPACT ON THESE ESTABLISHED PRIVATE SECTOR BANKS. STATKEHOLDERS INCLUDING LOW/MID INCOME PUBLIC WILL BE AFFECTED BY SUCH TAKEOVERS. INORGANIC ENTRY OF NEW PRIVATE PLAYERS INTO BANKING SPACE MAY HAVE TO BE CURTAILED. HENCE THE GOVERNMENT SHALL HAVE TO NATIONALISE OR MERGE WITH NATIONALISED BANKS THE ESTABLISHED(OLD GENERATION) PRIVATE SECTOR BANKS WHICH WERE FORMED BEFORE 1980 ie YEAR IN WHICH SECOND DOSE OF NATIONALISATION WAS DONE. This will make new players to create new space ie organic establishment exercise and not inorganic efforts of eating into existing space.As banking controls due to deposits more funds than share value by buying share private players may try to rest control of disproportionately higher finance in their hands. By nationalisation the customers and staff of existing established private sector banks also will feel secure and industrial disturbances will less.