FinMin asks PSBs to explore acquisition of smaller banks

Banks should study the possibility for mergers and acquisitions: FinMin

The finance ministry has asked four large public sector banks (PSBs) to explore opportunities for acquisition of small and mid-sized banks with a goal to create global sized lenders, sources said. One of the possibilities is that large PSBs, such as Punjab National Bank, Bank of Baroda, Canara Bank and Bank of India could try looking for potential candidates for acquisition, they said.

The finance ministry has sounded them that they should study the possibility for mergers and acquisitions, so as to acquire scale and size of the State Bank of India (SBI), they added. 
 

There are factors like regional balance, geographical reach,  financial burden and smooth human resource transition that have to be looked into while taking a merger decision, they said, adding there should not be merger of a very weak bank with a strong one “as it could pull the latter down”.