The Hindu Business Line : Bank consolidation

This refers to the news item and related articles in Business Line about State Bank of Saurashtra getting merged with the parent bank, State Bank of India. This is a good news for those who are looking for consolidation among the ba nks.

This may trigger consolidation of other associates of SBI with it and thus increase the SBI’s business by at least another 40 per cent.

There is already a virtual merger, considering the similar systems and procedures prevailing among the SBI associates and SBI itself.

This would help streamline branch functioning and result in the more productive use of the larger work-force.

This merger within the SBI group may also pave the way for consolidation among other banks.

Using this as a platform and considering the second pension option in the banking industry, the situation can be leveraged to reduce the work-force across the several banking entities, perhaps through one more round of voluntary retirement schems.

Thus, it is possible that the Finance Minister’s objective of a few large banks competing globally would be achieved fairly comfortably.

Brinda, Bangalore

More Stories on : Letters | Mergers & Acquisitions | Public Sector Banks

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