NEW DELHI: Central Government has given a go ahead to proposal to set up a ministerial panel in order to speed up consolidation of state-run banks as part of its attempts to revive credit and economic growth.
If sources are to be believed, Prime Minister Narendra Modi is going to name the members of the panel, which will be given a responsibility of overseeing proposals for mergers from the boards of the banks.
Statistics wise, Centre owns majority stakes in 21 financial institutions, which roughly account for over two-thirds of banking assets in Asia’s third-biggest economy.
Bank employee unions is not in favor of merger proposals over concerns they could lead to job losses. A million bank workers observed a one-day strike on Tuesday opposing bank mergers.
On the other hand, nine of the 21 state-run banks reported a net loss for the last financial year ended March. Thirteen had posted losses the previous financial year.