In 1969, Indira Gandhi issued an ordinance that the state had taken over 14 privately owned banks. The idea was that major banks should be publicly owned, so that they could work more for the “millions of farmers, artisans, and other self-employed persons”. This was opposed by Desai, who was eventually relieved of his ministry.
Five more banks were nationalized in 1980.
Eventually, with the liberalization of 1991, under Manmohan Singh and P.V. Narasimha Rao, the state licensed a small number of private banks. This led to a boom in the banking industry eventually, with a number of modern banks popping up. HDFC bank is an example, probably one of the better Indian companies right now.