Bangalore, Dec 29: Union Finance Minister P Chidambaram today said that Indian banks should go ahead with consolidation, both organic and inorganic, to achieve a faster pace of growth.
Speaking after inaugurating the 1000th branch of public sector Vijaya Bank here, he said, "The banks should consolidate on the recent gains and it should be a two way process. I know there is opposition to this in the banking sector but it has to happen." He said there was similar opposition to computerisation in banking system 20 years ago but it had proved very beneficial. "How long can you resist consolidation. Tata acquired Corus while Indian BT companies are taking over foreign companies. We are proud of them. The best way to grow is through consolidation," he said.
The finance minister's assertion comes in the wake of nation wide protest by the associate bank employees against the merger moves with the State Bank of India.
He said mergers will have to happen in the banking sector. "There was no choice. You have to accept this before external forces impose their choices upon you. Why should we be afraid of consolidation," he asked.
Mr Chidambaram said it was important for the banks to invest in people like retraining the staff and impart multi skills in them.
"All barriers or artificial divisions between officers, clerks or messengers will go. The future banking organisation will be flat and driven by technology where everything will be available by a click of the mouse," he said.
The finance minister advised the bank staff not to resist the chances which were inevitable. "Be prepared for a new kind of organisational and human resources development. Each one of you will have to become multi-skilled as this will be the driving force in the banking sector in the near future. Change will take place faster than you can comprehend," he added.