Maidavolu Narasimham, 80, the 13th governor of the Reserve Bank of India (RBI), must be a happy man in Hyderabad today. It seems that Oriental Bank of Commerce, Allahabad Bank, Corporation Bank and Indian Bank will be merged with Punjab National Bank; Union Bank will absorb IDBI Bank Ltd, Central Bank and Dena Bank; Syndicate Bank, Indian Overseas Bank and Uco Bank will be merged with Canara Bank; and Bank of India will grow by merging Andhra Bank, Bank of Maharashtra and Vijaya Bank with itself. The only instance of a state-owned bank being merged with another was in 1993, when New Bank of India was merged with Punjab National Bank and this was not a voluntary merger. (Out of these, Canara Bank’s NPAs are of the June quarter and the rest relate to the March quarter.) Indeed, bank consolidation is the flavour of the season, but one should not lose sight of the fact that India needs more banks.

Source: Mint July 24, 2017 02:15 UTC