Larger lenders to benefit more than smaller peers
Merger move seen as rationalizing the demand on government finances for capital infusion
Barring Indian Bank, all larger banks among their respective merger sets have lower capital adequacy ratio than the ones they are taking over
MUMBAI : By merging small public sector banks (PSBs) with their larger counterparts, the government has managed to rationalize the demand on government finances for capital infusion. An analysis of the data provided in the finance ministry’s presentation shows that the larger banks stand to benefit more in terms of capital adequacy than the smaller lenders, a sharp departure from the past, wherein the government infused capital in their balance sheets year after year.