Merger of public sector banks suggested one of the options to propel growth
New Delhi, Aug 24: Efficiency of the banking sector has been the major concern for the experts at the India Banking Conclave (IBC) as that plays very important role to ignite the growth engine but the sector is plagued by many problems. One of the many views that emerged in deliberations has been tightening and strengthening banking operations in India and if need be they should be merged into two three banks instead of over two dozen.
The suggestion for the banking sector from the Rajiv Kumar, Vice-Chirman, NITI Aayoh has been like this when he said, "My bottom line on this issue is that we must need to change it completely
whether foreign banks, public sector banks or private sector banks. And the government must keep arm-length distance from the banking sectors
While speaking to experts in the sidelines of conclave, they said that unless banking sector is strengthened the fast growth trajectory of the country is unthinkable. One of the director of a public sector bank bank said that to propel growth engine whatever correction is required that should be done.
Speaking on the occasion Vice Chairman of NITI Aayog reiterated, "We don't have any bank in the top 100 companies in the world. State Bank of India (SBI) making it to the list is placed between 250 and 300. But there are seven Chinese bank in top hundred. So the very imagination of fast growth is not possible."
The total lending by the two Chinese bank is more than the total lending of the world bank. Kumar quipped, "We are talking about becoming third largest economy by 2030 as projection tells but without putting banking sector in order this is not possible."
He asked, "Has the time come to look public sector banks into one entity." He stated to merger all 26 banks into two or three so they are at least able to improve world ranking.
Gopal Krishna Agarwal earlier said that SBI has initiated the process of merging it's affiliate banks. And they are now cohesively working.
Sources said that merger of some banks is being discussed from long but nothing concrete emerged. As the issue of merger is so extensively being discussed in the conclave, it appears that it will prominently figure into the report that would be handed over to the government both by the NITI Aayoga and Centre For Economic and Policy Research (CEPR).