The government has asked the Reserve Bank of India (RBI) to prepare a list of candidates for merger among 21 government banks as it seeks to strengthen a banking system laden with bad debt, people familiar with the matter said.

In a meeting this month, finance ministry officials also asked RBI to suggest a time frame for the consolidation, the people said, asking not be named as the information isn’t public.

The government bank merger move is aimed at creating fewer, better-capitalized lenders and improving regulatory oversight, they said.

(Source : Economic Times)

Read : Bank Mergers: Is it the panacea for the Banking Sector?

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1 Comment

R.K. GUPTA · August 30, 2018 at 11:35 am

This is a good step but at a bad time. In fact, RBI must ensure that all PSB has cleaned their balance sheet and there is nothing which is hidden under the carpet. RBI must insist for forensic audit of all accounts over and above a threshold limit. I am of the opinion till we do not know the dept of the water of the river, we cannot swim to reach the other bank of the river which is uncertain as all is based on perception. Once RBI comes to know the dept of total NPAs of the bank, such merger may be fatal for economy. We should remember that still banks are afraid of declaring the accounts NPA and borrowers are opposing for forensic audit as they know how the funds have been mis-utilized and diverted. All Industries and banker will cry and shout with the words that Govt does not believe in them. their will be failure of entire economy, there will be fear psychosis in the entire country and country will be …………….. Let them say any thing but to cross a river without knowing the dept is high risk zone for which there is no provision as on date specifically when the CAD is going to increase due to devaluation of Rupee and appreciation of Crude Oil prices.

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