Public Sector Bank Mergers- A myth becoming a reality?
About thirteen years back when an article was penned in this magazine ( ‘ Bank Mergers - The fall out and shape of things to come’ –M&A Critique Issues October to December 2004), it was foretold that eventual mergers of Public Sector Banks (PSBs) in India was an economic necessity for becoming globally competitive by acquiring the required critical mass. This fond hope was cherished not as a pipe dream or as a wishful thinking but as an ultimate global survival strategy. It was founded on a strong belief and repeated aversions from the Committees on Banking and Financial Sector Reforms, to have not more than three or four large public sector banks by merging the existing ones. The Finance Ministers, regardless of their political affiliations have invariably lent their lip sympathy to PSB mergers. Even today the economic compulsions to become true global players by taking the inorganic growth route remain the same but it is now evident that the socio-political ground have no...