The big bank idea

India needs more efficient financial entities

Finance Minister Nirmala Sitharaman said last week that India needed four or five banks of State Bank of India's (SBI’s) size to serve the growing and changing needs in the post-pandemic world. The minister further argued that one of the driving reasons for amalgamations in public sector banks (PSBs), which happened before the pandemic, was to create scale. It is not clear if the government is again considering the option of merging some of the remaining PSBs. In the last round of mergers, for instance, Oriental Bank of Commerce and United Bank of India were merged with Punjab National Bank,