Examining PSU bank merger issues: Govt
The Finance Ministry said on Saturday that it is examining various issues pertaining to mergers of public sector banks and that there will be some forward movement in the current year itself. ‘This year we will start something (consolidation) and next year something. This is very much doable and which will further strengthen the banking industry,’ Financial Services Secretary G S Sandhu said at an event organised by Ficci.
‘Various issues on consolidation are under examination. So based on the merit, we will take up the consolidation. It would be a long haul. It would not be an easy process. It would not be easy to do it in one go. So, gradually we will take it up,’ he said. Last week Finance Minister Arun Jaitley had said in his Budget speech, ‘There have been some suggestions for consolidation of Public Sector Banks. Government, in principle, agrees to consider these suggestions.’ Jaitley, speaking to reporters after the Budget, had said that the consolidation could be between a big bank and its subsidiaries.
Talks have been going on for long for merging SBI’s subsidiaries with the parent bank. SBI first merged its State Bank of Saurashtra with itself in 2008. Two years later in 2010, State Bank of Indore was merged with SBI.
The country’s largest lender has five associate banks — State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad. Among these, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed entities.
Finance Secretary Arvind Mayaram, who along with other secretaries of the Finance Ministry was interacting with industry leaders, said that the Government is open to discussing ideas with them and addressing their concerns. My own perspective is that this is a growth oriented Budget. It will bring the growth impulses back into the economy…. We will have to move a very difficult path ahead but there is a determination that the Government would walk that path,’ Mayaram said.
India’s economic growth slumped to sub-5 per cent in the past two fiscals. The Government has pledged to bring the fiscal deficit down to 4.1 per cent of GDP this fiscal. Industry had made many demands, Mayaram said, adding, ‘This is not the only budget the Government is going to present. This is not the only time that the changes could have been made.