In times to come, India will have only 12 government/Public Sector banks (PSB) out of 21 existing PSBs. The 21 PSBs would be consolidated to 12. The government is working on the merger with a view to create 3-4 global sized banks, too.
Last month, finance minister Arun Jaitley said the government is “actively working” towards consolidation of public sector banks but declined to provide details, saying this was a price-sensitive information. Enthused by the success of SBI merger, the finance ministry is considering clearing another such proposal by this fiscal if bad loan situation comes under control by then. Factors like regional balance, geographical reach, financial burden and smooth human resource transition have to be looked into while taking a merger decision, they said, adding a very weak bank should not be merged with a strong one “as it could pull the latter down”.
Some region-centric banks like Punjab and Sind Bank and Andhra Bank will continue as independent entities while some mid-size lenders would also co-exist, an official added.
In the last consolidation drive, five associate banks and Bharatiya Mahila Bank (BMB) became part of SBI on April 1, 2017, catapulting the country’s largest lender to among the top 50 banks in the world. State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT), besides BMB, were merged with SBI.
Inputs from livemint.com and financialexpress.com