Prepare a list of the public sector banks that can be merged: Govt asks RBI

The government has asked its central bank to prepare a list of candidates for merger among 21 government-controlled lenders as it seeks to strengthen a banking system laden with bad debt, people familiar with the matter said.

In a meeting this month, finance ministry officials also asked the Reserve Bank of India to suggest a time frame for the consolidation, the people said, asking not be named as the information isn’t public. The move is aimed at creating fewer, better-capitalized lenders and improving regulatory oversight, they said.

India has been battling for years to clean up its banks, which have the highest