Government's Stance: No State-Owned Bank Mergers or Consolidations Underway

The government has made it clear there are no current proposals for merging state-owned banks. FDI limits in public sector banks and private banks remain unchanged. Meanwhile, the strategic disinvestment of IDBI Bank progresses following CCEA's 2021 approval. Regional Rural Banks report improved financial health with increased net profits in recent years.

The government has confirmed there are no proposals on the table for the merger or consolidation of state-owned banks. This was announced by Minister of State for Finance, Pankaj Chaudhary, in a written response to Parliament on Monday.

The Foreign Direct Investment (FDI) limit remains 20 percent for public sector banks and 74 percent for private sector banks, as per existing guidelines. Chaudhary emphasized that FDI is crucial for economic development, bringing long-term capital, technology transfer, and innovation.

Regarding IDBI Bank, Chaudhary reported that its disinvestment will follow the Cabinet Committee on Economic Affairs' (CCEA) 'in principle' approval granted in May 2021, involving a significant stake alongside management control. He also highlighted the improved financial performance of Regional Rural Banks, noting their substantial net profits over the past two years.

(With inputs from agencies.)