Public sector bank consolidation discussed at bankers' meet

Five big state-owned banks are reportedly favourably disposed towards consolidation, it is learned after conclusion of a meeting convened by the finance ministry today.

According to chairman and managing director, M V Nair, Union Bank of India, it was a pure consultation meeting where views were put together on what the challenges or issues are in bank consolidation. He added that one view was that on the lines of the Narasimham committee, it is better to have four large banks in the country that have international presence.

While the idea received support for banks with greater scale and size, the banks thought the whole exercise should be conducted on a case-to-case basis.

According to M D Mallya, chairman and managing director, Bank of Baroda, if it happened it would be for the good of the industry. He added that consolidation would lead to banks of bigger size and scale in the country but should be looked into on a case-by-case basis.

Nair said banks have to do their homework and find out strategic fits with whom they can merge. He added that it would take time to work out finer details.

India has 27 public sector banks and consolidation in the sector would make for achieving the scale that would otherwise take years.

Top officials of large public section banks such as Punjab National Bank, Bank of Baroda, Union Bank, Bank of India and Corporation Bank, participated in the discussions at the meeting held at the banking division of the finance ministry.