PSU bank merger should follow balance sheet clean-up: Rajan

India Infoline News Service | Mumbai | September 13, 2017 14:38 IST

Merger of PSU banks should be done only after balance sheets are cleaned up and they are nursed back to health with adequate capitalisation, said former RBI governor Raghuram Rajan while interacting with a national news agency.

Raghuram Rajan
The merger of PSU banks should be done only after balance sheets are cleaned up and they are nursed back to health with adequate capitalisation, said former RBI governor Raghuram Rajan while interacting with a national news agency.
 
He was responding to a question on the government's push for consolidating public sector banks with an aim to create fewer and larger banks.

"It seems to me that cleaning up has been postponed for one reason or the other. We are in a reasonable position to do it. We need to actually achieve it and put the capital that is necessary to recapitalise the banks where it is needed and after it seems that some of the (merger) decisions can be made," he said.

Pointing out that going forward, the merger would not be as easy as SBI's that had few teething issues, Rajan said, "you would be merging banks with fairly different culture, fairly different orientation, system and region".

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