Finance Minister Arun Jaitley addressed the customary post-budget meeting of the central board of the Reserve Bank on Monday.
Post the meeting, Jaitley said India needs fewer and mega banks which are strong.
"India needs fewer and mega banks which are strong because in every sense from borrowing rates to optimum utilisation the economies of scale as far as the banking sector is concerned are of great help," Jaitley said.
On interim dividend, RBI Governor Shaktikanta Das said the central bank will take the decision based on the report by Bimal Jalan-led Committee.
Das also said that the RBI will discuss the issue of transmission of rate cut with bank chiefs on February 21.
Earlier this month, the Reserve Bank cut the benchmark interest rate by 0.25 per cent to 6.25 per cent.