- Objectives: To control commanding heights of the economy and meet development needs.
- Impact:
- Served to intensify social objective of ensuring credit for productive purposes.
- Led to rapid branch expansion in rural and urban areas.
- Rapid growth in deposits mobilized by banks.
- Credit expansions, especially in priority sectors.
- However, banks became unprofitable, inefficient, and unsound.
- This was due to poor lending strategy and lack of internal risk management.
- Fostered rigidities and inefficiencies in the commercial banking system.