|Demand of the question |
Introduction. Contextual Introduction.
Body. Various stakeholders and impact on them due to bank merger.
Conclusion. Way forward.
With government announcing the consolidation of 10 public sector banks (PSBs) into 4, India’s PSB count has come down from 27 in 2017 to 12. The mergers would help to create stronger institutions thereby leading to efficiencies of scale and stronger balance sheets. It will impact all the stakeholders i.e. customers, banks, employees of the banks and corporate sector and would help to rationalise costs across many areas including branches, people, technology etc. Customers should be able to get better service and better product suite and the best of all the merged entities. The Banking sector as a whole will get strengthened due to obvious efficiencies and will lead to enhanced productivity and better results thereby leading to better lending too.
Stakeholders and impact on them:
While there might be some shifts and changes to contend with in the short term, the mergers are aimed at providing a consolidated and strengthened PSB network in the country. The improved reach and stability this promises to give the merged entities can be beneficial for customers going forward. This would help in country’s progress and growth.