Bankers have hailed the Cabinet decision to approve the proposed merger of State Bank of India with one of its associates, State Bank of Saurashtra.
TS Narayanasami, chairman and managing director of Bank of India, said that it showed that the government is keen on pushing financial reforms, sending a good signal for market. ?We expect more financial reforms to take place in future. I do believe that reforms in the banking sector will become easier for the government now.?
Favouring the consolidation process in the banking sector, Narayanasami said that such consolidation can be the best thing for the banks at a time when the sector was being opened to the foreign banks a year from now.
MV Nair, chairman and managing director, Union Bank of India, said: ?It is the first trigger in the process of consolidation in the banking industry?. You have to learn from experiences, he added.
MD Mallya, chairman & managing director , Bank of Baroda, said: ? I don?t think that the market share of public sector banks will increase with consolidation. But it will help in ways like easing the capital requirement the banks are faced with and I also believe that size does matter in today?s era of competition.?
However TN Goyal, president, all India State Bank Officers? Federation, said: ?We are against any kind of merger in the banking sector as we feel that it will stop the flow of rural and agricultural credit.