The core challenge is that many of the public sector banks (PSBs) are undifferentiated, sub-scale, and with limited capabilities to be full universal banks. The recent bank consolidation debates often ignore the underlying challenges of India’s banking industry structure. If well executed, such a restructuring could catalyse a transformation of India’s banking sector. These large banks would offer a full-range of commercial banking services to corporate, small and medium enterprises (SMEs), retail, mass banking and international customers. Overall, rationalizing the PSB industry-structure is as essential as consolidation to make sure India’s banks are able to thrive in a tough environment.

Source: Mint June 20, 2017 18:24 UTC