With reference to “Fifth wheel of match making” (Business Line, August 27), the Finance Ministry’s changed stance of bringing bank mergers under the ambit of the Competition Commission of India is timely.

At a time when policy makers are still after mega-mergers among public sector banks, notwithstanding the failure of big banks globally, keeping bank mergers out of the purview of the Competition Act is unethical and pro-cartelisation.

The Government, the RBI and a section of bankers are for the merger of associate banks with SBI. Is this not creation of monopolies? By downsizing, cost is sought to be reduced.

But in a country such as India, with 60 per cent of the populace financially excluded and only 5 per cent of villages with banking facility, bank mergers for pooling capital and big loan disbursements will not serve national interests.

And this plan of bank mergers is part of a larger design that includes selling majority shares of PSBs to private entities, major foreign equity participation and outsourcing of basic banking services.

K.S. Krishna

Kochi

CRR debate

This refers to “Phase out Cash Reserve Ratio” (Business Line, August 24). The SBI Chairman deserves to be complimented for questioning a notion that has outlived its utility.

This issue has been analysed well in the article “Interest on CRR, a big mistake” (Business Line, August 24). Let us hope for more reforms that suit the changed economy.

K. Gopalan

Bangalore

(This article was published on August 27, 2012)
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