With reference to the report, "Govt's PSB reforms inadequate: Nayak" (September 17), the crux of the matter is that almost all governments at the Centre have lacked the will to pursue reforms in the public sector banking space. A true public sector banking reform would prune the number of banks in that space from the present figure of 27 to eight or nine. The exercise should begin by identifying small, medium and large-sized public sector banks followed by the merger of small and medium banks with the large ones.
Small banks can be taken up by larger ones. This should be preceded by an internal restructuring of the smaller bank vis-a-vis rationalising its branches, with the larger one. Consolidation would help the merged entity shore up its capital base and achieve economies of scale, besides deriving a host of accompanying benefits.
Srinivasan Umashankar, Nagpur
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