The Hindu Business Line : Finance Ministry to encourage mergers

THE Union Finance minister, Mr P. Chidambaram, has asserted that his Ministry would encourage the coming together of banks, but the move would have to be initiated by the respective banks that intended to join hands.

Speaking at the inaugural function of the 885th branch of Vijaya Bank, he expressed confidence about the Indian banking system reaching international standards very soon. "The 21st century mantra is Consolidate, Compete and Converge," he said. Mr Chidambaram compared the size of the banks in a small country such as Taiwan to that of the banks in India and called upon bankers to grow in size. He said that he hoped to see at least four or five of the country's leading banks rise to a global level and a similar number grow to the Asia level. Mr Chidambaram hailed the present performance of banks on extension of credit for various reasons, remarking that it was demand-driven, unlike in the past when banks were content with just lending to customers. Despite evincing optimism about surpassing the farm loan target of Rs 1,05,000 crore for the current year, Mr Chidambaram said he was aware that five banks were lagging behind in achieving the farm credit target and hoped they would be able to improve within the next four months. He did not identify the banks.

His presence at the function, he said, was to oversee if banks implemented the various welfare schemes mooted by the UPA Government in letter and spirit. Though behind schedule, the Minister took a quick look at each of the loan sanction letters before handing them over to the beneficiaries, besides enquiring as to the purpose for which credit was sought. He made it clear that he would not hesitate to initiate action against banks if they failed to extend financial support to deserving people. He called upon the people to bring such instances to his notice.

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