The Hindu Business Line : Bank mergers

The existence of separate laws for the SBI and other public sector banks can create roadblocks in the consolidation process. As observed, the Government need not push any mergers or amalgamations, but should play a vital role of a catalyst to ensure a healthy consolidation in the banking industry.

The present scattered condition of the commercial banks causes troubles in facing the stiff competition. The customers would also be relieved to have a reduced number of entities in the field.

Due to the constant changes in the functioning of banks, the industry requires a thorough revamp mainly through clubbing. In the process, it should be remembered that the weak banks should be wedded to the strong ones, including the SBI.

This could be achieved only by amendment of the SBI Act, the SBI (subsidiary Act) and the Bank Nationalisation Acts. But as the government faces challenge from the Left regarding the bank mergers, there should be a fruitful debate in the matter, involving the trade unions in the banks.

The government should lose no further time in the matter, as it is a long pending matter, pregnant with rumours.

C. P. Velayudhan Nair,

Kochi

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