PROCESS OF PSBs MERGER TO BE INITIATED AFTER FIRST QUARTER RESULTS
The question of Public Sector Banks being merged is in the anvil since long time. However, the Finance Ministry is expected to take a stand on consolidation of PSU Banks after the first quarter results of the current fiscal year (FY 2018) is announced, it is learnt. The issues related to the merger are:
- Regional Balance, Grographical reach, Financial burden and smooth human resource transition are the main issues to be looked in to in order to avoid merging a very weak bank with a very strong bank.
- Secondly a sense about the financial position like capital adequacy ratio, NPAs and core banking software solution being used by banks have been called for and a possible co-relation in the merger process should be worked out.
- The biggest merger of SBI and its subsidiaries could not see any problem as envisaged, because of their systems and procedures being the same transferring the accounting entries did not pose any issue.
However, last week the Finance Ministry had denied any proposal of such merger being in the Government’s cards at present.
We should however wait and see.