Process of finalising plan to consolidate PSBs on: Jaitley

Union Finance Minister Arun Jaitley today said the government is more keen to merge stronger banks rather than weaker ones and is in the process of finalising a strategy on consolidation of state-run lenders.

"The object of consolidation is to create bigger and stronger banks," Jaitley said, speaking at Bloomberg's India Economic Forum here.

"I would rather have stronger banks merging rather than weaker banks merging," he added.

The minister said bank consolidation has to move in tandem with the process of strengthening the banks, which are struggling with asset quality issues.

He said the government is also planning to come up with its strategy which will spell out the way forward on both consolidation and strengthening of lenders.
 

"We are at a very advance stage of deciding our strategy, we are looking at both consolidation and strengthening," he said.

Consolidation of the 21 state-run lenders to create banks of bigger size is being discussed for a long time with various combinations being speculated.

The government acted swiftly to merge SBI with its five associates and the Bhartiya Mahila Bank this year, but has not yet laid out the path for the others.

Jaitley, however, declined to give timelines on the consolidation process and limited himself to saying that the process continues to be on the agenda.

The success of dud asset resolution under the provisions of the Insolvency and Bankruptcy Code depends on maintaining the timetable, avoiding interim judicial interventions and also avoiding suspicion on bonafide decisions, he said.

Jaitley also said that the government is on the "verge of first big breakthrough" with regard to the National Infrastructure Investment Fund (NIIF).

He said the chief executive of NIIF is in place and is negotiating with foreign funds and added that once some commitment is received, the government is willing to put its share of investment in the first tranche.

On the teething troubles with GST, Jaitley said there is a need for the tax assesses to also spread their filing over the month and not clog the system on the final day, as it happened with the first filing last month.

He said a Parliamentary panel has cleared amendments to the Prevention of Corruption Act and hoped for them getting passed by the House in the winter session.