Till independence, banks in India were mostly private in nature, run by businessmen. Hence, the spread of credit was limited to urban areas and deposits were channelled towards related business groups. This created huge risks for depositors' money. The number of banks was large and failures frequent. Banks were characterised by low capital bases, insufficient liquid assets and inter-connected lending. Post independence, the government took various steps to ensure socially justified distribution of credit and proper flow to productive sectors of the economy. Several steps were taken to improve their presence, especially in rural areas. Banks were given a developmental role and it was felt that control of private banks in individual hands was doing more damage than good.