RBI to continue support for consolidation: official

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Mumbai, Apr 17 (UNI) The Reserve Bank of India (RBI), as the regulator and supervisor of the banking system, would continue to play a supportive role in the task of banking consolidation, based on commercial considerations, a top RBI official said today.

Speaking at International Banking&Finance Conference 2008, orgainised by Indian Merchants' Chamber (IMC) here today, RBI Deputy Governor V Leeladhar said with a view to further strengthen the Indian financial sector and support growth while securing the stability of the system, the Central Bank has been supportive of the initiatives for consolidation and there have been no cases so far where the approval for merger of banks was denied by the RBI, since the proposals conformed to the requirements and guidelines of the RBI.

Though consolidation in the public sector banking segment, which accounts for about 75 per cent of the assets of the banking system, is still underway, there are enabling legal provisions for the purpose in the respective statutes of the public sector banks, Mr Leeladhar said.

Over the years, there has been considerable progress in consolidation in India in the private sector banks and the mergers have happened not only between the weak and the healthy banks but also, of late, between healthy and well-functioning banks as well, he added.

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