The Government of India has given a surprising reply in the Lok Sabha related to the merger of PSU Banks. A question regarding the merger of PSU Banks was asked from the Government of India.
Following Questions were asked
- whether the Government proposes to further consolidate Public Sector Banks in order to enhance their operational efficiency, financial stability and global competitiveness and, if so, the details of the consolidation plan and its expected timeline;
- whether any Public Sector Banks operating in the State of Maharashtra are likely to be affected by the proposed consolidation and, if so, the details including the names of the banks, their branches and the districts in which they operate;
- whether the Government has conducted any assessment regarding the potential impact of the proposed bank mergers on customers, employees and rural banking services in the State, particularly in semi-urban and rural districts, and, if so, the details; and
- whether the proposed consolidation is likely to lead to a reduction in workforce or closure of branches in economically backward or remote regions of the State and, if so, the measures being taken to prevent adverse effects on employment and public access to banking services.
The Government of India clearly stated that Presently, no proposal on merger or consolidation of Public Sector Banks (PSBs) is under consideration of the Government.
This reply from the Government is totally contradictory as the Finance Minister of India – Smt. Nirmala Sitharaman, has herself confirmed the merger of PSU Banks. Finance Minister Nirmala Sitharaman on Thursday (November 6) confirmed that the government has begun work on the next phase of public sector bank (PSB) consolidation. She said India now needs several big, world-class banks to support the requirements of a fast-growing economy.
Speaking at an event in Mumbai, the minister said discussions have already started with the Reserve Bank of India (RBI) and various banks. “Work has commenced. We are discussing with the RBI and banks. This is not just about amalgamation. We need an environment where banks can operate and grow,” she said. She emphasised that the new phase may also involve privatisation of some PSBs, along with mergers. “India needs a lot of big, world-class banks,” she said, adding that decisions will be taken in consultation with the RBI. [Read this full news]
Thus, the reply of the Government is totally contradictory to the statement of the Finance Minister.
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