Seven banks identified to start consolidation; BoI to lead

tags:Business

New Delhi:-Finance Minister P Chidambaram has identified seven public sector banks (PSBs) that could initiate the much-anticipated process of consolidation in the fast changing Indian banking sector.

Addressing the Centenary year celebration of the Government-owned Bank of India (BoI), he said the BoI, which has been pioneering many firsts among the public sector banks including installation of first ATM machine and first computarised branch, must initiate the process of consolidation during its 100th year.

"BoI will take the lead in the consolidation process too among other public sector banks."

The seven banks are State Bank of India (SBI), Punjab National Bank (PNB), Canara Bank, Bank of India, Bank of Baroda, Union Bank and Central Bank of India, having a combined assets base of whopping Rs 50,000 crore.

Though the SBI is the largest bank among them, we need much larger four-five banks of global size to serve over one billion population in the country and compete in international markets, Chidambaram observed.

"There is a great opportunity of merger and acquisition of smaller public or private sector banks."

Later talking to mediapersons, the Finance Minister said the consolidation process in the banking sector should be driven by the Board of Directors' decision through co-operation of their staff and also support of the valuable customers.

"There should not be any misapprehension among the (bank) staff and customers on such process," he said.

In this context, he assured that his Ministry and the UPA Government would encourage and support the Board-driven proposal of consolidation among the Indian banks.