Click here to Visit the RBI’s new website

Chronology of Events

Social Controls, the Nationalisation of Banks and the era of bank expansion - 1968 to 1985

Date Event
Dec 1967 Introduction of Social Controls over banks with a view to securing a better alignment of the banking system to the needs of economic policy.
22 Dec 1967 National Credit Council set up to provide a forum to discuss and assess credit priorities on an all India basis. Council was to assist RBI and government to allocate credit.
01 Apr 1968 Quarternary Alloy Rupee Coins demonetised.
01 Sep 1968 Gold (Control) Act passed to bring the administration of the control on a permanent statutory footing.
(see: 1966 Gold Control Rules)
1968 Export Credit (Interest Subsidy) Scheme, 1968 introduced to promote exports. Pre-shipment Credit Scheme introduced wef Jan 1969 as an export promotion measure. This allowed banks to get refinance from the Reserve Bank.
29 Jan 1969 Setting up of the Banking Commission by GOI to report on (i) Banking costs; ( ii) legislations affecting banking; (iii) indigenous banking; (iv) bank procedures; (v) non banking financial intermediaries.
01 Feb 1969 Gold Holdings of RBI revalued at the current official IMF rate of 0.118489 grammes of fine gold per rupee (to take into account the devaluation of the Rupee by 36.5 % in June 1966) The profit on revaluation transferred to the reserve fund.
19 Jul 1969 14 major Indian Scheduled Commercial Banks with deposits of over Rs 50 crores nationalised ' to serve better the needs of development of the economy in conformity with national policy objectives'.
On February 10, 1970 the Supreme Court held the Act void mainly on the grounds that it was discriminatory against the 14 banks and that the compensation proposed to be paid by Govt was not fair compensation.
A fresh Ordinance was issued on February 14 which was later replaced by the Banking Companies (Acquisition and Transfer of Undertakings ) Act, 1970.
(5 of 1970).
24 Sep 1969 National Institute of Bank Management (NIBM) established at Bombay (Mumbai). Shifted to its Pune campus in the mid 1980s.
29 Sep 1969 Cooperative Bankers Training College (CBTC) established at Poona (Pune) to provide training to the cooperative sector. Later renamed College of Agricultural Banking (CAB) in 1974.
Dec 1969 Lead Bank Scheme introduced which envisaged an area approach to banking to meet the credit gaps in the economy.
01 Jan 1970 Special Drawing Rights (SDR) created by the IMF to enhance international liquidity.
Jan 1970 RBI prescribed for the first time the minimum interest rate to be charged by banks on advances against sensitive commodities.
Feb 1970 The Agricultural Credit Board set up with Governor as Chairman to formulate and review policies in the sphere of rural credit.
03 Apr 1970 The Managing Agency system abolished by the Companies Amendment Act, 1969.
04 May 1970 B.N. Adarkar appointed Governor till June 15
16 Jun 1970 S. Jagannathan appointed Governor.
Between Feb & Aug 1970 Inflationary trends led to concern and strong measures including increasing bank rate and raising SLR from 25 to 28%.
01 Nov 1970 New Bills Rediscounting Scheme introduced was expected to impart flexibility to the Money Market, even out liquidity within the banking system and enable the Reserve Bank to exercise more effective control over the money market.
14 Jan 1971 Credit Guarantee Corporation of India Ltd. established. To facilitate bank lendings to the priority sectors. It guaranteed credit extended by scheduled commercial banks to small borrowers and for other priorty purposes.
12 Apr 1971 Concerns related to Industrial sickness led to the establishment of the Industrial Reconstruction Corporation of India Ltd.
01 Jul 1971 Deposit Insurance cover extended to cooperative banks.
15 Aug 1971 Convertibility of USD suspended. This brought to an end the system of fixed exchange rates embodied in the Bretton Woods System. After an interim arrangement which lasted up to 1973, the world shifted to a floating exchange rate regime.
Oct 1971 State Level Bankers' Committees set up to consider problems requiring inter-bank coordination.
  Hindi Version of RBI Annual Report and Trend and Progress of Banking in India for the year ended 30 June, 1971.
25 Mar 1972 Differential Interest Rate Scheme Introduced which envisaged concessional interest rates on advances made by Public Sector Banks to selected low income groups.
03 Apr 1972 Import Policy for 72-73 stressed the importance of achieving self reliance reflecting the views of the times.
03 Nov 1972 Special payment arrangements with the erstwhile COMECON group of countries where payments were settled in rupees through bilateral trade which was a type of barter arrangement.
1973 "Oil Shock" when oil prices quadrupled. This led to double digit inflation as well as global recession.
As a response the Bank deployed a series of restricted measures to contain / moderate the expansion of bank credit.
Call money rate rose to an all time high of 30% prompting the Indian Banks' Association to intervene and fix a ceiling of 15%.
01 Sep 1973 Miscellaneous Non Banking Companies (Reserve Bank) Direction, 1973 sought to regulate the acceptance of deposits by companies conducting prize chits, lucky draws savings schemes, etc.
08 Sep 1973 Quantitative credit ceiling on non food bank credit prescribed for the first time for the busy season of 1973-74.
Nov 1973 Restrictions on SBI and its subsidiaries removed to bring them on par with other commercial banks.
01 Jan 1974 Foreign Exchange Regulation Act, 1973 came into force to conserve foreign exchange. Its administration was entrusted to the Reserve Bank.
09 Dec 1974 Asian Clearing Union (ACU) established to facilitate payments for current international transactions on a multilateral basis. Clearing operations were to be denominated in member's currency or AMU which would be equivalent to 1 SDR. Clearing operations commenced November, 1975.
13 Dec 1974 Reserve Bank of India (Amendment) Act, 1974 widened the powers of the Bank.
19 May 1975 N. C. Sengupta appointed governor up to August 19.
09 Aug 1975 Tandon Committee Report emphasized need to correlate bank credit to the business/ production plans and own resources of borrowers. Entailed a shift from 'security based' to 'need based' approach to bank credit.
The new norms formed the basis of bank lending for working capital requirements.
20 Aug 1975 K.R. Puri appointed governor
25 Sep 1975 Exchange value of Rupee linked to movements in a basket of selected foreign currencies (major trading partners)
26 Sep 1975 Regional Rural Banks were set up as alternative agencies to provide credit to rural people in the context of the 20 Point Programme.These were expected to "combine the rural touch and local feel, ……with the modern business organisation…”.
01 Nov 1975 Foreign Currency (Non Resident) Account Scheme introduced in USD and GBP To encourage private remittance from abroad.
16 Nov 1975 Agricultural Refinance Corporation (ARC) renamed Agricultural Refinance and Development Corporation (ARDC) and its activities widened.
1975 20 point economic programme introduced.
01 Feb 1976 Duty Draw back credit scheme introduced as an export promotion measure.
1976 Village Adoption Scheme for banks introduced.
Apr 1977 A new series of Money supply introduced the concepts of M1, M2, M3 etc. Money supply with the public consisted of
(a) currency with the public,
(b) demand deposits of all commercial banks, of state, central and urban cooperative banks and of salary earners societies, and
(c) 'Other deposits with Reserve Bank of India'.
02 May 1977 M. Narasimham appointed Governor up to November 30.
1977 Integrated Rural Development Programme (IRDP) initiated as a poverty alleviation measure.
01 Dec 1977 I.G. Patel appointed Governor.
16 Jan 1978 Notes of Rs 1,000/-, Rs 5,000/- and Rs 10,000/- denominations demonetised to curb 'the illicit transfer of money for financing transactions which are harmful to the national economy…'.
03 May 1978 RBI commenced gold auctions on behalf of Government of India out of government stock at fortnightly intervals.
27 May 1978 The Deposit Insurance Corporation (DIC) took over the undertaking of the Credit Guarantee Corporation of India Ltd. (CGCI) to form the Deposit Insurance and Credit Guarantee Corporation (DICGC) wef July 15, 1978.
03 June 1978 RBI Act amended. The amendments were made mainly to enable the more effective utilization of foreign exchange reserves.
12 Dec 1978 Prize Chit and Money Circulation Schemes (Banning) Act, 1978 came into force wef 12 December, 1978.
1978 Annual Appraisal of Banks introduced in the nature of management audit introduced. Emphasis mainly on the examination of the organizational set-up, manpower planning , machinery for supervision and control over branches, systems & procedures in key areas, funds management and management of credit.
30 Mar 1979 Penalty for non-compliance of CRR & SLR introduced to give the Reserve Bank teeth to implement Monetary Policy measures more effectively.
1979 Rural Planning and Credit Cell set up in the Reserve Bank of India to ensure proper implementation of the multi-agency approach to credit in rural areas.
Aug 1979 Credit Information Review started being published every month To disseminate in simple language and without delay the credit and banking policy decisions of the Reserve Bank.
17 Jan 1980 International gold prices soar to all time highs.
Mar 1980 Banks required to provide financial support to implementation of 20 point programme to improve lot of weaker sections.
  Sixth Five Year Plan.
15 Apr 1980 Six private sector banks nationalised “…in order further control the heights of the economy, to meet progressively, and serve better, the needs of the development of the economy and to promote the welfare of the people in conformity with the policy of the State…”
Dec 1980 Recommendations of Chore Committee related to the cash credit system, adopted. Emphasis on increasing contribution for working capital requirements by borrowers out of internal resources.
01 Jan 1981 Neighbourhood Travel Scheme (NTS) introduced.
15 Jan 1981 GOI announced special bearer bond To mop up unaccounted money and channelise it to productive purposes.
Apr 1981 Major Organisational internal restructuring in the Reserve Bank. New Departments set up.
1981 Build up of inflationary pressures and adverse movement in foreign trade following the hike in oil prices. Bank rate raised to 10%, CRR raised to 7.5%, SLR to 35%.
11 Juy 1981 Ordinance prohibiting companies (including Banking Companies) cooperative societies, firms, to repay any person any deposit otherwise than by an account payee cheque / bank draft when such repayment amounted to Rs. 10,000 or more.
01 Jan 1982 Export Import Bank of India established with the objective of providing comprehensive package of financial and allied services to exporters and importers.
01 Jan 1982 New 20 point programme announced by the PM.
12 July 1982 National Bank for Agriculture and Rural Development (NABARD) established on the basis of the National Bank for Agriculture and Rural Development Act, 1981. '…For providing credit for the promotion of agriculture, small scale industries, cottage and village industries, handicrafts, and other rural crafts for promoting integrated rural development and securing rural prosperity…'.
16 Sep 1982 Manmohan Singh appointed Governor.
1983 C D Deshmukh Memorial Lecture introduced as an annual event in Governor Deshmukh's honour
Nov 1983 National Clearing Cell (NCC) set up by the bank to introduce mechanised cheque processing and the national clearing of cheques.
12 Jan 1984 Banking Laws (Amendment) Act, 1983 widened the activities that banks could undertake (such as leasing), provided nomination facilities to account holders, strengthened the powers of the Reserve Bank, streamlined returns and prohibited unincorporated bodies from accepting deposits from the public except to a specified extent amongst others.
01 Feb 1984 Urban Banks Department formed to supervise the affairs of Urban Cooperative Banks.
01 May 1984 Authorised capital of the Deposit Insurance and Credit Guarantee Corporation raised to Rs 50 crores
15 Jan 1985 A Ghosh appointed Governor up to February 4
04 Feb 1985 RN Malhotra appointed