Govt forms panel to push merger of public sector banks, Arun Jaitley to head

Following the recent government announcement of a massive recapitalisation plan for public sector lenders, the government has constituted a ministerial panel headed by Finance Minister Arun Jaitley that will oversee merger proposals of state-owned banks.

The other members of the panel include Railway and Coal Minister Piyush Goyal and Defence Minister Nirmala Sitharaman.

"Govt walks the talk on banking reforms; constitutes Alternative Mechanism for PSBs consolidation; Finance Minister to head," Financial Services Secretary Rajiv Kumar said in a tweet.

While announcing the unprecedented Rs 2.11 lakh crore capital infusion roadmap for the public sector banks last week, Jaitley had said, this will be accompanied by series of banking reforms over next few months.

The constitution of Alternative Mechanism (AM) is a movement in that direction.

The Union Cabinet in August had decided to set up an Alternative Mechanism to fast track consolidation among public sector banks to create strong lenders.

The move to create large banks aims at meeting the credit needs of the growing Indian economy and building capacity in the PSB space to raise resources without dependence on the state exchequer.

The AM will oversee the proposals coming from boards of PSBs for consolidation.

PTI