Two days later she called in I. G. Patel, now Union economic affairs secretary. After ascertaining that banking was under his charge, she told him, without any preamble or pretence: “For political reasons, it has been decided to nationalise the banks. You have to prepare within 24 hours the bill, a note for the cabinet and a speech for me to make to the nation tomorrow evening. Can you do it and make sure that there is no leak?”

Patel rang up L. K. Jha — formerly secretary to Lal Bahadur Shastri and Indira and now governor of the Reserve Bank in Bombay — and asked him to to come to Delhi immediately, and bring with him R. K. Seshadari, a Reserve Bank officer who, during an earlier stint in the finance ministry, had prepared, at the instance of T. T. Krishnamachari, a former finance minister, a bill to nationalise banks “as a contingency measure.” Seshadri possessed the only copy of that document. The three worked through the night, Jha and Seshadari in the governor’s suite at the Delhi branch of the Reserve Bank and Patel at his house in Teen Murti Lane. The prime minister had all the papers she needed the next morning.

Twenty-four hours later, on a Saturday, the ordinance to nationalise 14 major banks was issued and instantly became a sensation, inviting sharp criticism from Indira Gandhi’s critics and enthusiastic support from the people at large. Parliament was to meet on Monday. To enact the ordinance into a law became its first task. Bank nationalisation surely affected the presidential poll and contributed to Reddy’s defeat and the Syndicate’s doom. But that is a long and complicated story to be told separately. Two facts about nationalisation of banks, however, merit a mention. First, when the Supreme Court invalidated the law passed by Parliament, the prime minister simply took over the management of banks without touching their ownership. She neatly sidestepped other judicial challenges, too. This inevitably accentuated her tussle with the judiciary that had started much earlier on a different issue. Secondly, in Delhi, crowds of workers, rickshaw drivers and others danced with joy on hearing the news. Almost none of them had ever darkened the door of a bank or was likely to do so in future. But all of them were happy that something was being done for the poor and the rich were being put in their place.

... contd.