Is SBI a nationalized bank ?

People often get confused about whether SBI is a nationalized bank or not. This question has been asked quite often in various interviews. When one of our readers posted a similar question on our Facebook page, we thought of explaining this in detail here in our blog.

SBI is NOT a Nationalized bank. It is a Public Sector Bank. Actually, SBI draws power from State Bank of India Act, 1955. Nationalized banks are the banks which were nationalized in two phases – in 1969 and 1980. These banks were established under Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980. So, these banks are governed by their respective statutes. In 1969, 14 Commercial banks were nationalized and in 1980, 6 more banks were nationalized. But, later in 1993, PNB and New India bank got merged taking the figure of nationalized banks to 19.

Now, couple of interesting question comes to our mind while we talk about nationalization of Banks, we’ll try and answer these questions.

1)      Why Nationalization of Banks was done by the Government?

  •  To raise public confidence in Banking system
  •  Expansion of banking facilities in a uniform manner
  •  Provide banking facility in rural and sub-urban areas
  •  Sought to end the monopoly control of big industrialists upon the banking system
  •  Aimed at giving more credit to priority sectors
  •  To reduce regional economic inequalities
  •  To ensure enough development funds for the planned growth of the country

2)      Why SBI was not nationalized during the waves of Nationalization of Banks in 1969 and 1980?

SBI was already under State control in 1969/1980, vide SBI Act, 1955. So, there was no need of Nationalization of State Bank of India. Banks which were nationalized in 1969/1980 were either owned by private business groups or individual investors.


History of Insurance in India

LIC AAO exam is scheduled on 11/12th of May 2013. When we reviewed the previous year papers, we found that almost ten questions in General Awareness section was from Insurance knowledge, most of which was related to history of insurance in India.  We thought it would be appropriate for us to write a blog on the same. So, here we go with the History of Insurance in India, hope it helps.

1818 saw the advent of life insurance business in India with the establishment of the Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance business in the Madras Presidency. 1870 saw the enactment of the British Insurance Act and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay Residency. This era, however, was dominated by foreign insurance offices which did good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies.

In 1914, the Government of India started publishing returns of Insurance Companies in India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable the Government to collect statistical information about both life and non-life business transacted in India by Indian and foreign insurers including provident insurance societies. In 1938, with a view to protecting the interest of the Insurance public, the earlier legislation was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for effective control over the activities of insurers.

The Insurance Amendment Act of 1950 abolished Principal Agencies. There were allegations of unfair trade practices. The Government of India, therefore, decided to nationalize insurance business.

An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies—245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector.

General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd., was set up. This was the first company to transact all classes of general insurance business. 1957 saw the formation of the General Insurance Council, a wing of the Insurance Association of India. The General Insurance Council framed a code of conduct for ensuring fair conduct and sound business practices.

In 1968, the Insurance Act was amended to regulate investments and set minimum solvency margins. The Tariff Advisory Committee was also set up then.

In 1972 with the passing of the General Insurance Business (Nationalization) Act, general insurance business was nationalized with effect from 1st January, 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on January 1sst 1973.

In 1993, the Government set up a committee under the chairmanship of RN Malhotra, former Governor of RBI, to propose recommendations for reforms in the insurance sector. The objective was to complement the reforms initiated in the financial sector. The committee submitted its report in 1994 wherein, among other things, it recommended that the private sector be permitted to enter the insurance industry. They stated that foreign companies be allowed to enter by floating Indian companies, preferably a joint venture with Indian partners.

Following the recommendations of the Malhotra Committee report, in 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. Please refer to our blog for the functions of IRDA.

The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%.

In December, 2000, the subsidiaries of the General Insurance Corporation of India were restructured as independent companies and at the same time GIC was converted into a national re-insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in July, 2002.

Today there are 24 general insurance companies including the ECGC and Agriculture Insurance Corporation of India and 23 life insurance companies operating in the country.

The insurance sector is extremely large and is growing at a speedy rate of 15-20%. Together with banking services, insurance services add about 7% to the country’s GDP.

Some of the important milestones in the life insurance business in India are:

1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning.

1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business.

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.

Some of the important milestones in the general insurance business in India are:

1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business.

1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973.

107 insurers amalgamated and grouped into four companies’ viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

Reference – IRDA and LIC website



SBI PO 2013 Analysis

Finally, SBI PO 2013 exam is over. After months of preparation, it’s time to relax before candidates start preparing for the IBPS PO-III which should happen anywhere between Aug-Sep. But before that, let us analyze how we fared in this exam and what the experts feel about the exam vis-a-vis SBI PO exam 2011.

To start with, let me put forward the initial reactions of the candidates after the exam on our Facebook page.

SBI PO Analysis 2013

Looking at these comments, it’s easy to say that the paper was relatively easier except the reasoning section and it was time consuming which was mostly on the expected lines. But then these are individual comments, not an expert comment and so, can be biased.

Before we move on, you can refer to our blog where we had analyzed the cut-off of SBO PO 2011.

Regarding this year’s SBI PO 2013 exam, we believe that while the test pattern was similar to last year’s, the level of difficulty was relatively lower. Quant and Di sets were not so difficult with very less calculation required. Though the puzzle in the reasoning section was on the difficult side, it was still easier compared to last time.

English Language constituted of 20 questions from Vocabulary, 2 Reading Comprehension Passages with 10 questions each, 5 questions on Para jumbles and few Grammar questions. This section was of moderate difficulty and students felt some difficulty while solving this section as the options were at times very close.

General Awareness/Computer/Marketing section was dominated by questions from Banking & Economy and Computer Awareness which were pretty straight-forward. This section should not have taken more than 15 minutes to solve.

The pattern of descriptive paper was almost similar to last time and any student in regular practice would easily crack this section.

Overall, the paper was time consuming but easier as compared to last year and hence, the cut-off should be on the higher side. We should also not forget that this time the number of applicants has risen and so, the cut-off should be even higher. According to our analysis, the expected cut-off should be as follows –

Minimum Qualifying Marks in each section












Maths & DI








Min Qualifying Marks in Objective test








Final Cutoff (Objective + Descriptive)




This is just an estimate and cut-off is based on independent analysis and evaluation made by Way2bank and may hence change depending on the marks scored by candidates in the exam. We wish you all the best!




Most Bank exams have 5-10 question on Simplification problems to be solved using BODMAS. It’s easy to solve them but then at times people get confused and commit silly mistakes. So, we thought we would re-iterate the basic BODMAS rule which is used to solve these problems for all to clarify such doubts, if any.

BODMAS is basically an abbreviated form of the order in which mathematical operations need to be followed while solving the Simplification problems. The letters of BODMAS stands for:

B – Bracket

O – Of

D – Division

M – Multiplication

A – Addition

S – Subtraction

Order which should be followed in case of brackets is as follows :

–          ( )

–          { }

–          [ ]

Note: When we have 2 same mathematical operations to be performed, we should go from left to right as explained in example 2 below.

Few examples which would help clear the doubts:

1)      [(3√8 + √8 ) (8 √8 + 7√8 )] – 98 = ?    (IBPS PO 2011)

= [√8(3 +1) √8 (8 + 7)] – 98

= [4√8 × 15 × √8 ] – 98

= [60 × 8] – 98= 480 – 98 = 382

2)      15 ÷ 5 ÷ 5

= 3 ÷ 5

= 0.6

In case of any doubts, feel free to post your queries on our Facebook page.



PO Descriptive Paper

Many of YOU have been posting on the YOUR own Way2Bank facebook page about how to tackle PO Descriptive Paper. Now before we start discussing about the topic, we request you to just stop here, take a minute and first of all ask YOURSELF why Bank PO tests YOU for descriptive questions.

If YOU can define this clearly then half of the battle is won.

Reason – Because, if YOU understand their need and application, then YOU would answer these questions as if YOU were sitting in a bank at the PO Position.This is what they want!


Don’t YOU think so?

Let’s build the conversation here by writing what appeared in IBPS PO 2012


Word Limit



Letter Writing


To your brother about the importance of CENSUS

To an authority about poor educational facilities in your area

To the newspaper about the role of a citizen in your area

(Any 1)

Essay Writing


Growth of Banking Sector in India

Role of Business houses towards Green Initiative

 Micro Finance Companies role in Socio-   Economic Development

(Any 1)

Précis Writing



Poverty in Indian and the World

In short, Job in a bank expects you to be good at writing. This is becoming all more imperative as the global society and industry has acquired e-mail as a standard media for communication in formal situations.

So, essentially e-mail based communication demands that YOU write the PO Descriptive Paper. Generally YOU don’t use exactly the same format in case of e-mail but bottom message, salutation etc remains the same.


  • Formal – letter writing to  newspaper; authority …in above table
  • Informal – letter writing to your brother …in above table


They all are the vital questions facing India as a country today. These questions need to be answered by the policy developers, business houses etc.

So, why a prospective banker (YOU being a PO) is expected to answer questions that are important to policy makers etc?

My Friends! YOU are the guys who would come out and finance many of the solutions charted out by the policy makers and business houses.


Makes Sense?

So, we suggest YOU to start thinking on following lines:

  • Issues facing India
  • Issues facing Banking Sector in India
  • Role of banking sector in country’s prosperity
  • Services of Banking sector – think beyond present…who thought somebody would bring something called MICROFINANCE…Check above…It is one of the Essay topics. Isn’t it?


Read Frontline Magazine – One stop place where all current issues are discussed and opinions are expressed…It just cost YOU Rs 20…even online edition is available…read it.

In the next post we are going to explain how to tackle these individual sections.





Highest Common Factor

 The largest positive integer which divides two or more integers without any reminder is called Highest Common Factor (HCF) or Greatest Common Divisor or Greatest Common Factor (GCF). Such as 12 and 18 have 1, 2, 3, and 6 as common factors or divisors but among them 6 is the highest common factor. So H.C.F. of 12 and 18 is 6.

Least Common Multiple

 The least common multiple (LCM) of two or more numbers is the smallest number (not zero) that is a multiple of these numbers. Such as 12 and 18 have 36, 72, 108, 144, …. as common multiples but 36 is the least among them. So L.C.M. of 12 and 18 is 36.

Few tips

1)      Product of two numbers = L.C.M. × H.C.F.

2)      Product of n numbers. = L.C.M of n numbers × Product of the HCF of each possible pair

3)      H.C.F. of decimal numbers

         Step 1: Find the H.C.F. of the given numbers without decimal.

         Step 2: Put the decimal point (in the H.C.F. of Step 1) from right to left according to the MAXIMUM decimal places among the                                  given numbers.

4)       L.C.M. of decimal numbers

           Step 1: Find the L.C.M. of the given numbers without decimal.

           Step 2: Put the decimal point (in the L.C.M. of Step 1) from right to left at the place equal to the MINIMUM decimal places among   the given numbers.

5)      H.C.F. of fractions =


6)       L.C.M. of fractions =


Important Results

1)      Find the GREATEST NUMBER that will exactly divide x, y, z.

Required number = H.C.F. of x, y, and z.

2)      Find the GREATEST NUMBER that will divide x, y and z leaving remainders a, b and c respectively.

Required number = H.C.F. of (x – a), (y – b) and (z – c).

3)      Find the GREATEST NUMBER that will divide x, y and z leaving the same remainder in each case.

Required number = H.C.F of (x – y), (y – z) and (z – x).

4)      Find the LEAST NUMBER which is exactly divisible by x, y and z.

Required number = L.C.M. of x, y and z (least divided).

5)      Find the LEAST NUMBER which when divided by x, y and z leaves the remainders a, b and c respectively.

Then, it is always observed that (x – a) = (z – b) = (z – c) = K (say).

∴ Required number = (L.C.M. of x, y and z) – K.

6)      Find the LEAST NUMBER which when divided by x, y and z leaves the same remainder ‘r’ each case.

Required number = (L.C.M. of x, y and z) + r.

Few Problems

1)      What is the greatest number which exactly divides 110, 154 and 242?

 Sol. The required number is the HCF of 110, 154 & 242.

110 = 2 × 5 × 11

154 = 2 × 7 × 11

242 = 2 × 11 × 11

∴ HCF = 2 × 11 = 22

 2)      What is the highest 3 digit number, which is exactly divisible by 3, 5, 6, and 7?

 Sol. The least no. which is exactly divisible by 3, 5, 6, & 7 is LCM (3, 5, 6, 7,) = 210. So, all the multiples of 210 will be exactly divisible by 3, 5, 6 and 7. Hence, greatest 3 digit number is 840. (210 × 4).

3)      Find the H.C.F. of 1.08, 0.36 and 0.9.

 Sol. Given numbers are 1.08, 0.36 and 0.90.   H.C.F. of 108, 36 and 90 is 18,

H.C.F. of given numbers = 0.18.

 4)      Find the least multiple of 7, which leaves a remainder of 4, when divided by 6, 9, 15 and 18.

 Sol. L.C.M. of 6, 9, 15 and 18 is 90.

Let required number be 90k + 4, which is multiple of 7.

Least value of k for which (90k + 4) is divisible by 7 is k = 4.

Required number = (90 x 4) + 4   = 364.

5)      The ratio of two numbers is 3 : 4 and their H.C.F. is 4. Find their L.C.M.

 Sol. Let the numbers be 3x and 4x. Then, their H.C.F. = x. So, x = 4.

So, the numbers 12 and 16.

L.C.M. of 12 and 16 = 48.

 6)      There are some students in the class. Mr. A brought 140 sweets and distributed to the students equally, then he was left with some sweets. Mr. B brought 180 sweets and distributed equally to the students. He was also left with the same no of sweets as Mr. A was left. Mr. C brought 260 sweets, did the same thing and left with the same no of sweets. What is the max possible no. of students that were in the class?

 Sol. The question can be stated as, what is the highest number, which divides 140, 180 and 260 gives the same remainder, i.e. HCF ((180 −140),(260 −180),(260 −140)).

i.e. HCF (40, 80, 120) = 40.

You can also refer to our study materials on Syllogism and Time and Work. In case of any doubts, feel free to post your queries on our Facebook page.




People come and ask me:

How can I put that last mark in the interview?

After showing that I am a person with VALUES; I have performed well in my STUDENT years; how can I assure the interviewer that I am a PROFESSIONAL as well?

We had already discussed some important parts of INTERVIEW Preparation. Let me make YOUR Job easy here:




For most of YOU, it is going to be your first job, for rest it may not be the first one. In either of the case, it is only expected that YOU follow a PROFESSIONAL CONDUCT.

What is a Professional conduct?

How am I supposed to behave and react?

It broadly has three parts:

  • Non- Verbal Cues – the way YOU give gestures
  • Verbal Cues – the way YOU speak
  • YOUR ATTITUDE towards learning

YOUR DRESSING SENSE – Stand in front of the mirror and ask yourself:

Do YOU look like an officer in a bank?

If the answer is Yes, YOU have nailed it. If not, YOU should reconsider your attire.


Do you seek permission before entering the interview room?


The way you walk in the interview room…

Do you greet each and every interviewer on the other side of the table by bowing a bit?

Do you wait for them to offer the seat and keep standing or you just grab and sit?

If they don’t offer the seat to YOU, then what do you do?

Keep standing for a few seconds, look at them, if they still don’t offer the seat, then politely seek their permission – JURY! May I take the seat?

Thank them when they offer it.


How are you sitting in there?

Is your posture right?

Back straight; with your palms on your lap facing downwards!

Do you look confidently in the eyes of Interviewer while answering the questions or listening to him?

Is your tone polite?

Are your answers coherent and make sense?

Ensure YOUR thoughts are clear and YOU stick to what YOU said earlier.

How do you behave when they push you and stress YOU by scolding YOU or asking any stupid/difficult question?

If you are not getting any answer to a genuine question, say politely I am not able to recall at this point of time. Be calm and smile a bit. The interviewer gets the notice YOU are not stressed even though they are trying to do so. For Silly question, simply SMILE!


Do ask some relevant question. Make sure you don’t bluntly say NO. Be prepared for this question while interview is ON. Take a clue form the discussions YOU had with them during the interview.


Say Thank You, stand up bow a bit once and say Good Day Jury!

Move confidently out of the room. Make sure you leave the door slowly. You shouldn’t bang it while leaving.


An important part of being professional is the kind of ATTITUDE YOU have.


Do YOU have the urge to learn more, particularly in the Job field they are going to hire YOU…one way to show YOUR urge to learn is simply by showing in the interview what YOU are learning in that field…What all YOU are reading and discussing about!

They also try to judge YOU on YOUR EXPECTED ATTITUDE towards fellow employees, YOUR seniors and juniors. Understand the Organization Culture YOU are going to be interviewed for. That helps!


Stay Posted!

The author is a management Graduate from a premier B School.
He has worked for nearly 3 years in the industry.
He can be reached through comments on the blog below.
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