Central government’s decision to merge ten Public Sector Banks(PSBs) into four large entities is the biggest ever overhaul in the public sector banking history of the nation since bank nationalization. In a strange coincidence, the announcement came on the day when it was officially made public that GDP growth has hit a low of 5% in 2019 April-June quarter, the lowest in last six years. Elaborating on the rationale behind the move, FM has said that the aim is to create ‘global-sized banks’ that would have stronger national presence along with a wider overseas outreach. Even though it may apparently seem that the step is intended to make the health of state owned banks robust, it’s not the only reason. Reading between the lines, it is clear that the larger aim is to inject an added boost on an immediate basis to the economy which is faltering unprecedentedly at the moment and also lay foundations of a more dynamic banking system that would coalesce well with the ambitious aspiration of a 5 trillion dollar economy by 2025. And like any other major shake-up, this great realignment is also drawing both optimism and pessimism from various stakeholders. But since it’s a serious matter concerning Indian economy, a stretch of at least a year and a half is necessary, when the picture will be much clearer for preparing a score sheet of this ‘experiment’.

PSBs have always played important roles in India’s financial structure and as they are intrinsically linked with the economy, there always existed a symbiotic relationship between them. For any general Indian, a PSB has always been a symbol of trust and for safe parking of hard earned money and precious possessions of the likes of jewellery and others, a nearest branch of any such good-old bank has remained the first choice. But even if with such an emphatic presence, it’s a fact that most PSBs have fallen sick due to an increasing overburdening of Non-Performing Assets(NPAs). Quality professional services, except of a handful few, has also fallen sharply that has caused a dip in their business volumes. It’s also an open secret that of the gross volume of NPAs, corporates account for the bulk and it seems there is no option but to watch in utter dismay how public money is continuously frittered away by so many ‘high-flying’ individuals.

Few will doubt that a deep-rooted culture of vested political and bureaucratic interference has remained a solid reason behind these much talked about scams and gradual downfall of PSBs over the decades. And until this tendency is nipped first, the new experiment of mergernomics will always carry every chances of failure in coming days, the ultimate and destined sufferer being the Indian economy.

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Kenter Joya Riba

(Managing Editor)
      She is a graduate in Science with post graduation in Sociology from University of Pune. She has been in the media industry for nearly a decade. Before turning to print business, she has been associated with radio and television.
Email: kenterjoyaz@easternsentinel.in / editoreasternsentinel@gmail.com
Phone: 0360-2212313

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