Govt has no plan for PSU banks merger: FM

In a recent briefing, Finance Minister Nirmala Sitharaman clarified that the Indian government currently has no plans for the merger of public sector banks. This statement came after her post-Budget address to the Reserve Bank of India Board, where she emphasized that the topic of bank consolidation was not part of the pre-Budget discussions. However, she announced the formation of a High-Level Committee on Banking for Viksit Bharat, aimed at reviewing the banking sector and aligning it with India's growth objectives while ensuring financial stability and consumer protection. This committee will explore various facets of strengthening the banking system, including the potential creation of larger banks capable of fulfilling the financing needs of a developed nation. Additionally, the Budget proposed restructuring the Power Finance Corporation (PFC) and the Rural Electrification Corporation (REC) to enhance efficiency in public sector non-banking financial companies. RBI Governor Sanjay Malhotra noted that Indian banks are well-capitalized and can support credit growth for the next several years, further aiding economic expansion. Despite a decline in net foreign direct investment (FDI), he reported an increase in gross FDI, highlighting a positive trend in investor confidence in the country’s economic landscape.