Number of banks to fall in India? Read big Arun Jaitley quote
Fewer banks in offing in India? Bank account holders would definitely be concerned at what is in store. Providing a peek into the thinking of the NDA government on Monday was Finance Minister Arun Jaitley, who elaborated on the concept that will help the country. Arun Jaitley said India needs fewer and megabanks to achieve economies of scale in the sector. "With the experience in the past really has been of SBI merger, now it is the second one which is taking place," Jaitley said after the customary post-budget address to the RBI board. ( Image Source: PTI)
Amalgamation of Bank with SBI
After the amalgamation of five associates and Bharatiya Mahila Bank with SBI in 2017, the government earlier this year approved the merger of Dena Bank and Vijaya Bank with Bank of Baroda. (Image Source: Reuters)
Need strong megabanks
"India needs fewer and megabanks which are strong because in every sense, from borrowing rates to optimum utilisation, the economies of scale as far as banking sector is concerned are of great help," Arun Jaitley said. (Image Source: Reuters)
Merger Dena, Vijaya and Bank of Baroda
The Union Cabinet last month approved the merger of the three banks to create the country's third-largest lender after SBI and ICICI Bank. The amalgamation, the first-ever three-way consolidation of banks in India, would be effective from April 1, 2019.(Image Source: Reuters)
PSBs come down to 18
What is noteworthy is that, after the merger, the number of public sector banks (PSBs) in India will come down to 18.
In September 2018, the Alternative Mechanism, headed by Arun Jaitley, gave in-principle approval for the merger of the three banks to create a global-sized lender. (Image Source: Reuters)
RBI board meeting
Queried on the issue of interim dividend following the customary post-Budget Reserve Bank of India (RBI) board meeting here chaired by him, Finance Minister Arun Jaitley said it was the prerogative of the central bank to decide the quantum of RBI's interim dividend to be paid to the government. "The RBI takes an independent decision on the interim dividend," Jaitley said. (Image Source: Reuters)