Budget 2021: All eyes will be on the package FM unveils for state-run banks

A status check on the consolidation of four sets of state-run banks offers clues to the hard decisions that are needed, write Abhijit Lele and Raghu Mohan

When Finance Minister Nirmala Sitharaman presents her second budget today, all eyes will be on the package she unveils for state-run banks. Will a Bank Investment Company (BIC) come into being? Or are we to settle for recapitalisation — a limited one, at that? And will these make for a substantial difference? A quick look at the mergers of four sets of state-run banks (effective April 1, 2020), reveals that much more may need to be done.

It was in August 2019 that New Delhi decided to merge Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and United Bank