Managing Consolidation in the Banking Industry

Business television channel CNBC-TV18 and software giant Oracle together recently organised a discussion on 'Managing Consolidation in the Banking Industry' in Mumbai. This first-of-its-kind exclusive roundtable explored the challenges of consolidation in the banking industry from the business angle, the employee standpoint, the customer's point of view, the technological angle as well as the impact of Basel II banking and supervision guidelines.

The discussion showed that business realities together with finance ministry directives might make consolidation inevitable for banks. The forum revealed that 'preparing for consolidation' was the need for businesses earlier, but the new environment has thrown up fresh challenges for banks, to test the veracity of the concept of consolidation.

Panellists included Union Bank of India CMD Cherian Varghese, Oriental Bank of Commerce CMD B D Narang, Dena Bank CMD Anil Khandelwal, Yes Bank MD and CEO Rana Kapoor, ICICI Bank DMD Kalpana Morparia, Deloitte Touche Tomatsu ED Ashwin Parekh, Asia Pacific Oracle Corporation Vice President (Financial Services) Alan G Payne and McKinsey Director Leo Puri.

ICICI Bank DMD Kalpana Morparia said, "Today, the top five banks constitute 43 per cent of the total banking market. Mergers are inevitable because of concentration in the segments; they happen because they make business sense, not because they are a good thing to do."

Yes Bank MD and CEO Rana Kapoor, said: "Small is beautiful. Small comes without legacy. We have the freedom to put robust systems in place." He further observed: "Catalytic forces need not necessarily be foreign. Enough potential exists within our country."

CNBC-TV18 vice president (sales and marketing) B Sai Kumar said: "Consolidation in the banking business has finally become a reality. Through this forum, CNBC-TV18 wants to empower Indians to make informed decisions and improve their quality of life."