Govt eyes active role in PSU bank consolidation

The government could play an active role in bringing about consolidation among the public sector banks, in case they fail to take forward the process on their own. Mahua Venkatesh reports.

The government could play an active role in bringing about consolidation among the public sector banks, in case they fail to take forward the process on their own.

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Until now, the government has been maintaining that it would remain a mere facilitator in the process and the bank managements would need to take decisions on the same.

The government has underlined the need to carry out mergers among the state owned banks to make them globally more competitive and financially stronger but there has been no action in the last five years.

“We want bank managements to take the decision on merger and the government would facilitate the match but in case there is no development, it could look at playing a more active role in the process and start nudging the banks on the same,” a senior finance ministry official, who did not wish to be identified, told Hindustan Times. However the official said that there is no immediate plan to become proactive.

A PSU bank chairman added that the merger exercise would not see the light of the day until the government tool an active interest in the process.

“The PSU banks are owned by the government and if consolidation has to take place among these banks, then the finance ministry cannot just be a mere facilitator,” the chairman said.