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Ever wondered why many of us still prefer nationalised banks in Indian like SBI and PNB over new-age private banks? Well, it’s not just a habit; it’s trust, legacy, and a little history. These nationalised banks have been the backbone of India’s financial system since independence.
In this blog, let’s dive into what nationalised banks are, why they matter, and what the complete list looks like in 2025. Whether you’re planning to open your first bank account or apply for an education loan, this guide will help you understand the role of nationalised banks in India.
Table of contents
What are Nationalised Banks?
Nationalised banks are banks that were taken over by the government to ensure wider financial inclusion and stability. These are also called Public Sector Banks (PSBs).
In these banks, the majority stake (more than 50%) is held by the Government of India.
Nationalised banks in India operate under the supervision of the Ministry of Finance and follow guidelines issued by the Reserve Bank of India (RBI).
Key differences between Nationalised and Private Banks:
| Feature | Nationalised Banks | Private Banks |
| Ownership | Government-owned | Privately owned |
| Reach | Extensive in rural areas | Mostly urban-centric |
| Loan Interest Rates | Generally lower | Comparatively higher |
| Customer Service | Functional, may be slower | Tech-driven, faster |
List of Nationalised Banks in India (2025 Updated)
As of 2025, India has 12 nationalised banks. These banks were formed after multiple mergers to strengthen the banking system, also offering some of the best savings accounts for students.
| Bank Name | Year of Nationalisation | Headquartered in |
| State Bank of India (SBI)* | 1955 (as Imperial Bank) | Mumbai |
| Punjab National Bank (PNB) | 1969 | New Delhi |
| Bank of Baroda (BoB) | 1969 | Vadodara |
| Canara Bank | 1969 | Bengaluru |
| Union Bank of India | 1969 | Mumbai |
| Indian Bank | 1969 | Chennai |
| Indian Overseas Bank (IOB) | 1969 | Chennai |
| UCO Bank | 1969 | Kolkata |
| Bank of Maharashtra | 1969 | Pune |
| Central Bank of India | 1969 | Mumbai |
| Punjab & Sind Bank | 1980 | New Delhi |
| Bank of India | 1969 | Mumbai |
*SBI is not included in the 1969/1980 nationalisation waves. It was nationalised earlier in 1955.
Also Read: Banking Full Forms List
History of Nationalised Banks in India
The journey of bank nationalisation in India is a significant chapter in the country’s economic development.
It was driven by the vision of ensuring financial inclusion, reducing regional disparities, and extending banking services to the unbanked population, especially in rural and semi-urban areas.
1955: The Beginning – Formation of the State Bank of India (SBI)
The first major step toward nationalisation was taken in 1955, when the Imperial Bank of India was nationalised and restructured to form the State Bank of India (SBI), making it one of the first nationalised banks in India.
The move was aimed at creating a state-partnered banking institution that could lead the way in providing financial services to the common people.
SBI was tasked with expanding the banking network to rural and underdeveloped regions and financing agriculture, small industries, and exports.
1969: Nationalisation of 14 Major Banks
A landmark moment came in 1969, under the leadership of then Prime Minister Indira Gandhi. The government nationalised 14 major commercial banks, each with deposits over INR 50 crore.
This decision was taken to align the banking sector with the goals of economic planning and development. The move was intended to:
- Spread banking infrastructure in rural areas.
- Ensure that credit is available to priority sectors like agriculture, small-scale industries, and self-employed individuals.
- Curtail the concentration of economic power in the hands of a few industrialists.
This phase marked a massive expansion of bank branches, particularly in remote and rural areas, offering education loans in India to those in need of financial assistance.
1980: Second Phase of Nationalisation
In 1980, the government carried out another round of nationalisation, bringing 6 more private banks under its control.
With this, around 91% of the banking business in India came under government ownership. The objective remained the same: deeper financial penetration, equitable credit distribution, and support to sectors ignored by private banks.
Recent Bank Mergers in India: Then vs Now
To create stronger, more efficient, and globally competitive banks, the Government of India initiated a major consolidation drive in the public sector banking space.
The goal was to reduce fragmentation, improve operational efficiency, and strengthen the capital base of public sector banks.
These mergers were not just about reducing the number of banks but about creating “next-generation” banks with a larger geographical reach, better digital infrastructure, and the ability to support India’s growing economy.
Here’s a detailed look at the major mergers:
| Pre-Merger Banks | Post-Merger Entity |
| Allahabad Bank + Indian Bank | Indian Bank |
| Oriental Bank of Commerce + United Bank of India + PNB | Punjab National Bank (PNB) |
| Andhra Bank + Corporation Bank + Union Bank of India | Union Bank of India |
| Syndicate Bank + Canara Bank | Canara Bank |
| Dena Bank + Vijaya Bank + Bank of Baroda | Bank of Baroda (BoB) |
Also Read: Highest Paying Banking Jobs Abroad in 2025
Interesting Facts About Nationalised Banks
Nationalised banks have played a crucial role in India’s economic development by promoting financial inclusion, supporting priority sectors, and maintaining trust among the masses. Beyond their services, these banks have some fascinating milestones worth knowing.
Check out some of the interesting facts about nationalised banks in India
- SBI handles over 22% of the total banking market in India.
- Bank of Baroda was the first Indian bank to set up an international branch (in 1953).
- Punjab National Bank was founded in Lahore in 1894 and was the first Swadeshi bank.
- Most government scholarships and subsidies are disbursed through nationalised banks.
- Canara Bank was the first to launch an exclusive branch for women in 2001.
- Indian Bank was the first public sector bank to introduce a digital village initiative.
To sum up, nationalised banks have played a huge role in building India’s economy from the ground up. From funding small businesses to offering education loans to students, their services impact millions of lives every day.
If you’re planning to study abroad or apply for an education loan, exploring nationalised banks could be a smart and secure choice.
Stay informed. Stay financially wise. Check out the FAQs below for more information.
FAQs
There are 12 nationalised banks as of 2025. These are-
SBI, PNB, Bank of Baroda, Canara Bank, Union Bank, Indian Bank, Indian Overseas Bank, UCO Bank, Bank of Maharashtra, Central Bank of India, Punjab & Sind Bank, and Bank of India.
State Bank of India, nationalised in 1955, was the first nationalised bank in India.
Banks like Punjab & Sind Bank and Central Bank of India are currently 100% government-owned.
No, HDFC Bank is a private sector bank. It was established in 1994 as a private banking company. It is one of India’s largest private banks but is not owned or managed by the Government of India.
Yes, Bank of Maharashtra is a nationalised bank. It was taken over by the Government of India during the nationalisation wave in 1969 and has remained a public sector bank since then.
No, Kotak Mahindra Bank is a private-sector bank. It was the first non-banking financial company in India to receive a banking license from the RBI in 2003. It is not government-owned.
Yes, in India, the terms “nationalised banks” and “public sector banks” are used interchangeably.
There is no major difference. Nationalised banks are also referred to as government or public sector banks.
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