Competition, convergence and consolidation will be the key drivers of the banking industry in the future, he said here, after inaugurating a branch of Punjab National Bank. The minister added that the unions and associations have the responsibility of communicating and educating the employees of these new drivers. He pointed out that only 20 public sector banks are in the top list of top 1000 world banks and Indias only entry in the top 25 Asian banks is the State Bank of India.
Mr Chidambaram said that he would urge the employees and staff to reflect on consolidation. It adds size, scale, muscle, technology and reduces cost of operations, he said.
He said that the focus should be on having strong banks and not numbers. It may be noted that the unions have highlighted that mergers would lead to job loss. However, the minister said that the fear of job loss was totally unjustified. On the contrary, jobs would be created, he said.
The public sector banks have become stronger with a wide array of products, in the last 15 years, despite opening of the sector in 1990s. He added that the next step was to consolidate, which would lead to expansion of business, increased leanding and reduction in cost.