Government Denies Further Public Sector Bank Mergers

The government is not considering further mergers of public sector banks, according to Finance Minister Pankaj Chaudhary. Instead, efforts focus on strengthening public sector banks' financial conditions. Past mergers have enhanced synergies, technology integration, and financial parameters, with significant consolidation reducing bank numbers since 2017.

The government is not contemplating additional mergers of public sector banks, Minister of State for Finance Pankaj Chaudhary clarified on Tuesday. Instead, several initiatives aim to fortify the financial health of these banks.

Chaudhary highlighted reforms that have bolstered the banking sector, introducing systemic improvements and checks to curb the risk of excessive financial strain.

Past mergers have improved capital adequacy, non-performing asset positions, and technology integration across banks, leading to better financial performance. The large-scale consolidations, reducing the number of banks from 27 in 2017 to 12, were meant to create globally competitive state-owned banks.

(With inputs from agencies.)