Despite that the banking system in India is governed by Banking Regulation Act, 1949 and works under the regulatory authority of Reserve Bank of India, the Government of India had nationalized the banks in the year 1970

All the banks working in the Indian Banking System till 1968 were under Private Ownership and working as per provisions of Banking Regulation Act, 1949 under the Regulatory body being RBI. All such banks since were catering to the needs of urban India and therefore the Government of India when noted that the Indian Banking System is not providing ownership and not catering for the economic uplift at the rural area, mobilization of deposits from public at large and to have a social control of banks so that the banks contribute to the economic regeneration of rural and semi-urban areas of the country decided to nationalize 14 banks in July, 1969 through the ordinance Banking Company (Acquisition and Transfer of undertaking) Ordinance which was made into law in 1970. In view of stringent capital adequacy norms as well as mounting NPA amongst the PSU Banks and to arrest sliding performance in their contribution to the economic development of the country Government of India decided in 2018 to consolidate the PSU Banks for the better contribution of the banks in the economic development of the country and therefore all the associate banks of the State Bank of India and Bharatiya Nahila Bank were merged in State Bank of India and thereafter in April, 2019 Vijaya Bank and Dena Bank were merged with Bank of Baroda and in April, 2020 other PSU Banks were also merged so that now having limited number of banks. Oriental Bank of Commerce and United Bank of India were merged with Punjab National Bank, Syndicate Bank was merged with Central Bank, Andhra Bank and Corporation Bank were merged with Union Bank of India and Allahabad Bank was merged with Indian Bank in the Second Phase in August, 2019 and the names of all these merged bank were excluded from the 2nd schedule of the Reserve Bank of India Act, 1934 from 01.04.2020 and these banks have ceased to carry bank business after 31.03.2020.