New Delhi: Government is considering a proposal for merger of State Bank of India and State Bank of Saurashtra as the boards and unions of the two have approved the move.
This was stated by Minister of State for Finance Pawan Kumar Bansal in Rajya Sabha on Tuesday.
The boards of directors of SBI and State Bank of Saurashtra have approved merger to “allow economies of scale in terms of network, manpower and other resources besides entailing better management of risks,” he said.
“The proposal is under examination of the Government,” he added.
He said the Government would not put pressure on banks to merge although the Narasimham committee on banking sector had recommended consolidation in the banking sector so that Indian banks are equipped to compete at the global level.
“Government is of the view that any proposal for consolidation, by way of merger etc of one public sector bank with another, should emanate from the concerned bank with Government playing a supportive role,” he said.
He said although the country needs banks having international standards to compete at the global level, amalgation must arise from business compulsions and it is not necessary that all the banks merge.