No change in character of PSU banks: FM

Finance minister P Chidambaram today said that the public sector character of the merged entity would not be diluted while merging two state-owned banks.

"The government will retain the public sector character of the banks in the context of consolidation or merger between two state-owned banks," Chidambaram said.

The government would like to give more autonomy to banks, but they must also improve efficiency, he added.

"Though the government had announced a series of measures to give more powers to banks, the government would like to extend larger degree of autonomy," he said.

Speaking on amalgamations, Chidambaram said: "We will not allow any closure of bank branches in the event of consolidation. On the contrary, more branches would be opened," he added.

Close-by branches of the merged entity might be closed, Chidambaram said.