India's Finance Minister Arun Jaitley said the Centre would pursue more mergers in the state-run banking space as it aims to have stronger and bigger banks at the international level. “Today banking is not what it used to be 10-20 years ago... It is necessary to have 30-32 public sector banks, some of them weak? Obviously not. What will you do with weak banks,” Jaitley asked.
“We have merged five subsidiaries of SBI and the Bharatiya Mahila Bank with SBI. I have announced that we want fewer banks but bigger and stronger banks which can be of international level. In the coming days, most probably we will move faster in this direction.” The Bharatiya Mahila Bank and five associate lenders merged with the State Bank of India on April 1, giving it a place among the top 50 banks globally. State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore, merged with the SBI. With a branch network of around 24,000 and nearly 59,000 ATMs across the country, the total customer base of the bank will reach 370 million.
When asked if there is a need to cut interest rates given the slide in inflation, Jaitley said the monetary policy committee of the Reserve Bank of India would take all factors into consideration. “Normally any Finance Minister will tell you that there are good reasons to cut interest rates. This is an inherent desire of any Finance Minister. But what should be the interest rate is decided somewhere else which is the Reserve Bank of India,” he said.
“Inflation was in double digit before 2014 and now it has come down to 3-4% range. We are within the plus minus 4% range. In our monetary policy committee, where there are six very eminent people, including the RBI Governor, they will decide and I feel we must have confidence on them. They will definitely keep in mind all the factors.”
