The Government is looking at consolidation among the 27 state-owned banks to create 4-5 large sized lenders, a process that will begin with the merger of SBI and its associates in the current fiscal. It is also looking at its stake in IDBI Bank coming down from 80 per cent to 60 per cent if stake dilution happens via QIP, a finance ministry official said.
“Finance Ministry’s view is that there should be 4-5 lenders after consolidation of PSU banks. To begin with, SBI and its associate banks are to be merged, while decision on other banks will be taken in due course,” the official added.
The official said that merger of SBI with associate banks is likely to happen towards the end of this fiscal. last week, the Cabinet had approved the merger between SBI and its associate banks.
“Trade unions will have to be taken on board before the consolidation exercise starts,” the official said. SBI, PNB, Canara Bank and Bank of India are among the large state-owned banks in the country.
In his Budget speech, Finance Minister Arun Jaitley had announced that the Government will unveil a roadmap for consolidation of public sector banks (PSBs) which are expected to get an infusion of Rs25,000 crore this fiscal.