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Public Sector Banks further merger is possible: Experts


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Is India downsizing its public sector banking landscape? The Lok Sabha committee’s agenda suggests it could be a real possibility. Scheduled meetings with four specific banks next year offer clues.

Recently, government released a documents having details of meeting of parliamentary committee. In the document it was written that the committe will discuss about post-merger scenario with the representatives of UCO Bank, Union Bank of India, Bank of India and Bank of Maharashtra.

Soon after the document went viral over internet, it was withdrawn by the government and the word merger was deleted from it and it was written that the parliamentary committee will meet representatives of the 4 above mentioned banks.

But as per the news published in The Hindu Business Line and as per the experts, government may think about merger of banks. Strong balance sheets, low NPAs, and high market prices make further consolidation and subsequent privatization lucrative for the government.

Prior to 2020, six banks merged into four, and in 2019, two more joined Bank of Baroda. But the government’s privatization plan for two PSBs might be on hold, given their improved financial health.

Finance Minister Sitharaman, however, has a different perspective. At a banking event in 2021, she envisioned five more SBI-sized banks to cater to evolving economic needs.

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