PSU banks merger: For the merged bank focus ought to be strategy, not size

Three into one gives Bank of Baroda an opportunity to innovate

He may have struggled to mend India’s broken banking system but at least Prime Minister Narendra Modi is shrinking the number of state-run banks to 19 from 26.

Although, that’s nowhere close to the original idea of ending up with just six, it’s a good start. The next step will be to nudge most taxpayer-funded banks away from me-too corporate lending, the reason for their $210 billion bad-loan debacle.

The latest plan, announced Monday evening, calls for moth-eaten Dena Bank Ltd., which has a bad-loan ratio of 22 per cent, and a far more pristine Vijaya Bank Ltd. (non-performing assets