Statsguru: How PSBs deal with integration in a challenging biz environment

The RBI in December 2019 noted that private sector banks accounted for 69 per cent of incremental loans in 2018-19

The announcement of swap ratios for the combination of 10 public sector banks (PSBs) into four has put the spotlight on such unions, and how they have fared before. Analysts would be keenly watching as to how the entities deal with the integration in a challenging business environment. 

Each of the 10 banks participating in the process has more bad loans than it did five years ago (chart 1), though much of it is to do with better disclosures. The slowing economy has reduced credit offtake  (chart 2). Bad loan ratios are expected to largely worsen for the anchor banks,