No proposal for merger of PSBs, says govt

The government today said it was not considering any proposal for merger of public sector banks (PSBs).

"No," Minister of State of Finance Namo Narain Meena said in a reply to a question whether the government has taken a decision to merge PSBs.

The current policy of the government on consolidation leaves the initiatives for consolidation to come from the managements of the banks themselves, he said in a written reply to the Rajya Sabha.

While examining any merger proposal, government keeps in view the interest of the shareholders and employees of merging banks.

He also said the Reserve Bank issues a single class banking licence, both to domestic as well as foreign banks, to conduct all types of banking business ranging from retail, wholesale, forex and derivative products, credit cards etc.

In January, 2011, he said RBI issued a discussion paper on the mode of presence of foreign banks through branch or wholly-owned subsidiary for public comments.

After examining the feedback, comments and suggestions on the discussion paper, comprehensive guidelines on the mode of presence of foreign banks in India would be issued by the RBI.

In a separate reply, Meena said the share of institutional credit has increased to 61.1% in 2002 from 31.7% in 1971 as per All India Debt and Investment Survey of the National Sample Survey Organisation in 2003.

At the same time, the share of money lenders came down from 36.1% in 1971 to 26.8% in 2002, he said.

In response to another question, Meena said the RBI released a discussion paper on entry of new banks in private sector in August 2010 inviting comments and suggestions from various stakeholders.

RBI is examining the views and comments received from various stakeholders. Thereafter, RBI will issue draft guidelines for public comments, he said.

In another reply, he said that housing loan outstanding increased to Rs 2,50,269 crore at the end of March 2011 against Rs 2,30,941 crore as of March 2010.

SBI has informed that the total amount written off in non-performing assets is Rs 662 crore in the first quarter of the financial year 2011-12, Meena said in a separate reply.