(ET)
Reserve Bank of India’s former governor Raghuram G Rajan has questioned government’s move to merge public sector banks. While saying consolidation is not unwarranted, Rajan stressed the government should be clear what purpose would it solve.
In an interview to ET, Rajan said bank mergers would be a complex process. “Consolidation itself requires a whole lot of time and effort by bank CEOs and bank managers throughout the system. You have to merge IT systems, you have to merge you have to merge HR systems etc that involves a tremendous amount of work,” he said.
He said the fact that banks were already weak would make mergers even more problematic. “You have explain how it is going to be easy to do that. Why this is going to be helpful and not just another distraction which weakens the entire entity,” he said.
