Spain's central bank wants a third of the country's 45 savings banks to be quickly absorbed by stronger institutions as part of radical reform of the sector, a report said on Monday.
Bank of Spain governor Miguel Fernandez Ordonez said a series of mergers were under discussion among regional savings and loans institutions, with the plans to be implemented within months.
"I think there are at least 15 institutions that should merge with others," he said told the Financial Times newspaper.
"I hope (by) next spring we have restructured all these institutions, that's my idea. We now have many, many mergers that we are discussing."
Spanish commercial banks got off relatively lightly from the subprime crisis last year that caused chaos in the financial sector around the world.
But some, especially smaller saving banks, were badly exposed to the collapse of the country's once-booming property market, which led to higher bad debt ratios and liquidity problems.
These banks now account for about half of outstanding loans in Spain, and several are heavily exposed to bankrupt property developers, the FT said.
In March Spain placed the regional Caja de Ahorros Castilla La Mancha under special administration.
And in June, Spain announced a multi-billion-euro fund to help revive the financial sector by buying stakes in banks hit by the global crisis and get them lending again.
Fernandez Ordonez wants to use this Fund for Ordered Bank Restructuring to achieve his aim of multiple mergers, according to the newspaper.
From now on, the central bank wants the stronger savings banks to finance takeovers out of their own resources, or to borrow money from the fund that will eventually be repaid.
He added that the aim was to avoid using taxpayers' money as far as possible and said further rationalisation and cost-cutting in the form of branch closures was essential.