(PTI)
Reserve Bank of India Governor Urjit Patel has said the Indian banking system could be better off if some public sector banks are consolidated to have fewer but healthier entities, as it would help in dealing with the problem of stressed assets.
“As many have pointed out, it is not clear that we need so many public sector banks. The system could be better off if they are consolidated into fewer but healthier banks,” Dr. Patel said while delivering the Kotak Family Distinguished Lecture at Columbia University here.
He said since there were cooperative banks and micro-financial institutions to provide community-level banking, “some banks can be merged, as a quid pro quo for timely government technical injection.”Dr. Patel said a challenge that India’s central bank was grappling with was the large stressed banking sector balance sheets.He noted that a series of measures have been taken in the past year on resolving the problem of the non-performing assets (NPAs), including completion of a comprehensive asset quality review of the banks.
