Financial Daily from THE HINDU group of publications
Friday, Sep 10, 2004
Financial Daily from THE HINDU group of publications Friday, Sep 10, 2004 |
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Public Sector Banks Money & Banking - Mergers & Acquisitions Govt to amend laws to facilitate merger of PSBs Our Bureau
The Finance Minister, Mr P. Chidambaram, along with his deputy, Mr S. S. Palanimanickam, at a meeting with the chief executives of public sector banks and financial institutions in the Capital on Thursday. - - Ramesh Sharma
New Delhi , Sept. 9 THE Finance Minister, Mr P. Chidambaram, today said that the Government would encourage consolidation within public sector banks and would help bring about a favourable legislative framework that would facilitate mergers. However, he said that the decision on the actual process of mergers would be left to the boards of the banks. "We are not going to push for consolidation. However, if banks want to consolidate we will not come in the way," Mr Chidambaram said after a daylong meeting with chief executives of public sector banks here. He said that legal amendments, including minor ones required in the Income-Tax Act, would be brought about to remove any hurdles in consolidation. "We need a small amendment in the I-T Act which would be carried out in February next," Mr Chidambaram said. However, he did not elaborate on the specifics . The Finance Minister also said that the Government would encourage banks to raise further capital by way of public issues. "I have encouraged them to go to the capital market," he said. On the interest rate movement, Mr Chidambaram said that he expected stability in interest rates in the medium term. "In the medium term, interest rates are expected to be stable. That is my assessment," he said. The Finance Minister said that there was excess liquidity in the market and banks would be encouraged to lend. On foreign direct investment (FDI) in the sector , Mr Chidambaram said that the Government would take the final decision on the FDI limits after the RBI comes out with a second discussion paper on ownership patterns in private sector banks.
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