Bank Consolidation: Necessary but Inadequate
Dipinder S Randhawa
15 October 2019
The consolidation of public sector banks is a much-needed step. However, the problems facing banking in India – ineffective governance, pervasive intervention by politicians in lending decisions, and an inability to resolve the mounting volume of non-performing loans – are much more severe and cannot be tackled through bank mergers alone. Public sector banks in India need deeper structural reforms to help revitalise growth in the economy.