The proposed consolidation of public sector banks will not take place purely on merit but will be influenced by extraneous factors including the political environment, Banks Board Bureau chairman Vinod Rai said on Tuesday. Rai, who was appointed in February to oversee the overhaul of public sector banks, also revealed a key motivation behind the State Bank of India’s merger was to assess the response to the consolidation. The government set the ball rolling for consolidation of 27 public sector banks in June this year when it cleared SBI’s merger with five of its associate banks and Bharatiya Mahila Bank. Bank unions have opposed the merger and last month, went on a token one-day strike. That would, he said, be the “best fits”“Unfortunately for the public sector, it is not purely on merit that consolidation will take place,” he said.

Source: Hindustan Times August 17, 2016 13:07 UTC