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Govt to support public sector banks to merge
Government will support public sector banks to merge if they wanted, provided they fulfilled RBI and SEBI guidelines, Finance Minister Pranab Mukherjee said today. - REpower to supply 70 wind turbines to US enXco - Bond yield may rise further - Sunil Jain: The great Bhopal whitewash">Sunil Jain: The great Bhopal whitewash - IIFCL moots dynamic structuring - RBI could wait a little before buying IMF gold: PMEAC - Govt mulls tax treaty review with 76 nations "If someone decides to merge, if we see it is in conformity with our policy and if we find that parameters are being followed as per the SEBI and RBI guidelines", then government would play a "supportive role", he said in reply to a calling attention in the Lok Sabha. Maintaining that the government has itself not taken any initiative to ask public sector banks to go for merger, he said it did not intend to interfere in their routine financial activities. "The current policy of the government on consolidation leaves the initiative for consolidation to come from the management of the banks themselves, with the government playing a supportive role as the common shareholder," he said, asserting that no directive on consolidation was being issued by the government or the RBI. The boards of the banks have to take a decision in this regard "based on the synergy levels of merging or consolidating entities", he said. The calling attention motion was moved by CPI leader Gurudas Dasgupta who asked whether the government had taken any initiative "overtly or covertly" to merge various public sector banks resulting in "discontent" amongst the bank employees. Dasgupta referred to the move for merger of State Bank of India and State Bank of Indore and asked why the latter was being merged despite doing very well in terms of per employee performance. He also said the move was being opposed by the Madhya Pradesh government. Mukherjee assured Dasgupta that interests of stakeholders, including the employees of the merging banks and customers, would be fully protected. Asserting that there was no government interference in the normal day-to-day financial and commercial activities of the state-owned banks, he said: "We are giving them managerial autonomy. We cannot give them a directive that don"t merge." Noting that such mergers had taken place even when the Left was participating in the United Front government in 1996-98, the minister said while 46 banks were merged till 1969 when banks were nationalised, 33 banks were merged after that year. Mukherjee said consolidation was a "continuous process" as mergers had occurred during "every regime". Maintaining that the banking system had "undergone major changes" since nationalisation, he said the State Banks of Travancore-Cochin, Bikaner and Saurashtra were doing a "good job" and were being encouraged to do better. Dasgupta said mergers would not only lead to monopoly and lower competition in the banking sector, it would also lead to reducing access to banking for the vast majority of people.Pay loans commented:
This will be gud for the banks as this will boost up the economy
22.08.2011
Payday uk commented:
Banks will get really benefits from this and they will be on the way to success
07.09.2011
Loans next day commented:
If Government will support public sector banks to merge, provided they fulfilled RBI and SEBI guidelines, then definitely Banks will get benefits from this and they will be on the way to success.
24.09.2011
car hire commented:
The government has decided to sanction Rs 2,000 crore to some public sector banks as part of its recapitalisation drive
12.10.2011
Australian Property Tax commented:
Government will support the public sector banks to merge. It will make for stronger bank base in public sector
18.10.2011
Family Offices Asia commented:
Government will support public sector banks to merge if they wanted, provided they fulfilled RBI and SBI guidelines,
23.11.2011