Finance ministry is looking for the possible measures to merge the leading lending institutions of the country. In order to make the financial institutions more stronger the Finance Minister is planning to come up with this measure.
First proposed plan is to combine the Punjab National Bank, Indian Bank and Dena Bank, and create a bank with an asset base of more than Rs 9 lakh crore. Another combination suggested was Allahabad Bank, Corporation Bank, Bank of Maharashtra Bank and Punjab & Sind Bank. According to a report by Morgan Stanley, there is significant overlap among various state-owned banks in terms of branches, mode of operation and clients. Both private and public banking sector have suggested the proposals.
But it has been also noticed that the merger is not going to be so easy because of the given strength of the unions. In presentations to the finance ministry, most investment bankers pointed to HR issues standing in the way of consolidation efforts. The only issue is to look for the unification of the integration of technology as all these banks work on different banking solution platforms. RBI is also ready for the mergers that are not forced. FINMIN is looking for the leading 3-4 banks having pan-India presence with entities present across all financial service sectors.