New Delhi: According to a senior official of the Ministry of Finance, this center aims to start the next round of the merger of a public sector bank in the hope of having 4-5 large banks. This will be done after examining comprehensive studies that have been assigned to the results of merging in banks managed by the government.
With a merger, this center hopes to have 4-5 large and strong banks from the largest loan-lending state bank in the country, the official told the Economic Times who asked for anonymity. At present, India has seven large and five smaller public sector banks.

Caring banks have been asked to send their feedback at the end of the month. We will hold a wider consultation through the Indian Bank -Bank Association (IBA) and with other stakeholders before strengthening future strategies, “the person said.

Merger announcement

Three years ago in 2019, this center announced the merging of 10 nationalized banks to four large lenders, thereby reducing the number of public sector banks to 12. Two years before in 2017, India had 27 lenders managed by the State. The merger came into force from April 2020.
Meanwhile, the National Applied Economic Research Council (NCAER) report on the privatization of PSB which believes to support the privatization of all PSBs that prohibit SBI. It underlined that PSB was mostly lagging behind a private bank in all main indicators of performance over the past decade. Written by the Director of NCAER Poonam Gupta and Economist Arvind Panagariya, the report said, “They have seen acid loans and operational costs soaring. This PSB has also achieved a lower return of assets and equity than their private sector partners.”

However, the public lender has done better on all the main indicators in recent years and in FY22 duplicating their profits, the Ministry of Finance officials recorded. While the center wants to maintain its presence in this sector, he wants to reduce the number to around 4-5 of the 12 existing banks, the official said.
The Bill on the same thing is likely to be introduced in the upcoming monsoon session to make amendments to facilitate the privatization of the state -managed bank. One of the amendments that is being considered is allowing the government to come out total from the privatized bank, an official was distributed last month.
The Law on Banking Company (acquisition and transfer undertakening), 1970, requires the central government to hold at least 51 percent of public sector banks.