Government to hire experts for bank mergers: report

The finance ministry will soon appoint N M Rothschild, Ernst & Young, and McKinsey & Co as consultants to guide Canara Bank, Bank of India and Bank of Baroda through bank consolidation, according to a report.

Quoting an unnamed finance ministry official, The Economic Times said today that consultants for two other banks are likely to be appointed by the month-end.

Banking consolidation has seen little progress due to resistance from various quarters, particularly trade unions and the bank boards.

While small banks fear losing their identity, the big ones are against taking on assets that might turn liabilities in the long run. According to the report, the finance ministry plans to take the unions on board.

Unions have no reason to be alarmed as the grading system, pay scale and business environment among banks on the merger radar are almost the same, the paper said quoting another unnamed official.

New banking secretary R Gopalan will meet state-run bank heads in February in this regard, this official added.