India's Money Makeover: From 1949 to demonetisation and to the UPI boom
14 Nov 2025, 02:02 PMIn this edition, we look at the Reserve Bank of India post its nationalisation, a period that quietly shaped India's financial destiny.
Muskan Singh
Share the story on
In this Money Trivia edition, we look at the Reserve Bank of India post its nationalisation -- a period that quietly shaped India's financial destiny long before terms like fintech and digital payments entered our lives.
From just a concept to being nationalised, the RBI's journey is quite fascination. Do check our previous edition of Money Trivia on this.
When the Reserve Bank of India became fully state-owned on 1 January 1949, it marked more than a simple change of ownership. The move signalled that monetary power would be central to India’s nation-building project. Through the 1950s and 1960s, the RBI’s role expanded from currency management to steering credit flows, regulating banks, and supporting the government’s Five-Year Plans. The Banking Regulation Act, which came into force in 1949, strengthened the central bank’s supervisory grip and laid the foundations of modern banking oversight.
But the real shift in India’s financial landscape came two decades later. In July 1969, the nationalisation of 14 major commercial banks brought nearly 85% of deposits under state control. It was a moment that redefined Indian banking when credit was pushed towards agriculture, small industries, cooperatives, and rural borrowers. A second round of nationalisations in 1980 reinforced this direction and expanded the public-sector banking network deep into the country’s hinterland.
Fast-forward to the 2000s and early 2010s, when the RBI’s priorities were shifting once again towards financial stability, inflation targeting, and a calibrated opening up of India’s payment systems. Yet, nothing would match the shock and scale of what came on 8 November 2016.
In a late-evening announcement that caught the nation off-guard, the government declared the immediate withdrawal of Rs 500 and Rs 1,000 banknotes. The stated goals were to eliminate black money, curb counterfeit currency, and push India toward greater formalisation and digital adoption. Long queues outside banks, frantic deposits, and a rush to exchange notes became defining images of the period. By the end of the exercise, nearly all invalidated currency had returned to the system -- sparking debates that continue even today.
Having said that, the demonetisation gave wings to UPI -- a system that reshaped how India pays, lends, and does business today.
.jpg)
.jpg)
Who Reads Us
“I enjoy reading The Head and Tale for their coverage on the Fintech landscape. The reporting is incisive and honest, and it demonstrates a sharp understanding of the industry and the issues that concern it. I'd like to extend my best wishes to Arti for her continued success.”
“Well-researched, informative and analysis based reporting makes an interesting read. 'The Head and Tale' news portal has been demonstrating this quite well covering fintech and emerging tech sectors. Their timely updates, exclusive stories and different perspectives on these sectors help me stay informed. Kudos to Arti Singh for pursuing her passion and best wishes to the team.”
“The Head and Tale stands out for its deep industry knowledge and impressive network of sources. I especially appreciate that the reporting remains independent, rarely resorting to paid puff pieces, making it a publication I can genuinely trust. Having followed Arti’s work for years, I’ve come to rely on The Head and Tale for its unparalleled insight and truly independent coverage. Arti’s long-standing presence in the sector means her reporting is always informed, with access few can match.”
“What I really appreciate about The Head and Tale is that it doesn’t just report the news, it interprets it. The stories are well-researched, comprehensive, and bold. Arti brings a fearless lens to reporting, often asking the uncomfortable but necessary questions. She makes you pause, reflect, and rethink what it all means for the payments and fintech ecosystem. It’s rare to find journalism that’s this sharp, timely, and relevant to the work we do every day.”
“I’ve always valued journalism that goes beyond surface-level headlines. The Head and Tale does exactly that - it connects the dots, asks the tough questions, and brings clarity to the shifts shaping our evolving industry. I’ve even encouraged my team members to subscribe, because staying informed through credible, deeply reported stories is as important as building products. For me, The Head and Tale has become part of essential reading.”
Related News
