Privatisation is far more difficult than consolidation

For public sector banks, the government is the superboard, with both ownership and regulatory powers under its belt. Is it ready to give up these powers?

India needs more banks to match the scale of the nation’s largest lender, the State Bank of India. Finance Minister Nirmala Sitharaman reiterated this last month at the annual general meeting of premier bankers’ body, the Indian Banks’ Association (IBA). Asia’s third largest economy is shifting to a different plane in the post-pandemic world. There are many new challenges. We don’t need just more, but bigger and stronger banks to meet those challenges.
 
This was the logic behind the consolidation drive, which has brought down the number of public sector banks from 27 to 12 in three years between