PSB consolidation off the table for now

Focus of banks to shift towards enhancing recoveries, risk management and improving their liability profile

The drive for consolidation among public sector banks will subside with the government announcing a Rs 2.11-lakh-crore capital infusion plan for them. Instead, the focus will shift to nursing ailing PSBs back to health.  

Public sector bank executives said the government was over the past year engaged in an exercise for the merger of some banks. This was not an apt time for M&As with PSBs deep in the red due to a huge portfolio of bad loans and the obligation to provide for them, they added.

With a government assurance on infusing capital, the focus in the coming quarters will