Indira Gandhi did the trick that stunned her opponents, know how she made banks a ‘weapon’

Indira Gandhi announced the nationalization of banks in 1969.

With the country’s independence in January 1949 Reserve Bank of India was nationalized. It was necessary to do this because this bank was owned by the British. in 1955 Imperial Bank Of India nationalized which now State Bank Of India It is known by the name of and is the largest government bank in the country.

This is considered the first round of nationalization of banks. Jawaharlal Nehru was the PM of the country at this time, the second round of nationalization went on during the time of his daughter Indira Gandhi. In 1969, the then Prime Minister Indira Gandhi suddenly nationalized 14 big private banks. Behind this step of Indira Gandhi were policies related to long politics and economy. Indira Gandhi not only responded to her opponents with this step, but also got majority in the next election by giving the slogan of Garibi Hatao.

politics behind nationalization

There was a long politics behind the simultaneous nationalization of 14 banks. In fact, after the death of Jawaharlal Nehru in 1964, Lal Bahadur Shastri took over the power of the country. By that time the Congress had split into two factions. One group was feudal, which was led by Morarji Desai and the other group was Samajwadi whose advocates were from Nehru group.

This was the reason why Morarji Desai did not get a place in the Shastri cabinet and was given the responsibility of the organization. Indira Gandhi was given the Ministry of Information and Broadcasting. After Shastri’s death in 1966, the political situation changed. Gulzari Lal Nanda was made interim PM, Congress got majority in 1967 elections. Indira Gandhi took over the chair of the PM and made Morarji the Deputy Prime Minister by joining other factions with her.

tussle started increasing again

By 1969, there was again estrangement between the two groups. After the death of the then President Zakir Hussain, the tussle regarding the presidential election came to the fore. Congress candidate Sanjeev Reddy was made, but Indira Gandhi supported VV Giri who also won the election. Morarji Desai did not like this, so he complained to the then Congress President S Nijalingappa and got Indira Gandhi expelled from the party. He was accused of indiscipline. Indira retaliated strongly and formed her own party, whose name was ruling Congress.

Indira did the trick that stunned her opponents

Indira Gandhi’s faction was discussing the nationalization of banks. Morarji Desai was against it. That’s why Indira Gandhi played her bet. Communist PN Haksar was the Principal Secretary in those days. He called DN Ghosh and asked him to prepare an ordinance for the nationalization of 14 banks within 24 hours. Ghosh has mentioned this in his autobiography ‘No Regret’. On July 19, 1969, the then Prime Minister Indira Gandhi gave a message to the countrymen on the radio and announced nationalization. Protesting Finance Minister Morarji Desai was removed and the ordinance was approved.

Indira Gandhi got the benefit

The issue of nationalization of banks benefited Indira Gandhi politically. In the elections held after 1971, he gave the slogan Garibi Hatao and got a majority in return. After this, Indira Gandhi also nationalized coal, iron, copper, refining, cotton textiles and insurance industries. This phase of nationalization continued till 1991. After this, the emphasis was again on privatization.