In the name of big ticket reforms, Finance Minister Nirmala Sitharaman announced consolidation of Public sector Banks. 10 PSBs have been consolidated into 4 big Banks keeping 2 banks namely Bank of India and Central Bank of India as national Banks and respected regional identity of 4 Banks namely, Indian Overseas Bank, UCO Bank, Punjab and Sindh Bank and Bank of Maharashtra.The other 10 Banks are consolidated into 4 Banks headed by PNB, Canara Bank, Union Bank and Indian Bank. Finance Minister whose maternal home is Andhra Pradesh did not bother to keep regional identity of Andhras, the Andhra Bank, the household name in Andhra.
When Punjab & Sindh Bank was nationalised in 1980, Indira Gandhi assured Punjabis that despite nationalisation, the regional identity will be protected. It was incorporated that only Punjabi will be posted as CMD of the Bank. Now, also, its regional identity was protected. What about Telugu people?No such assurance at that time as well as no protection now. In SBI and Associate Banks amalgamation, SBH, the only Bank hailing from erstwhile Hyderabad State was merged in SBI. Now, the only remaining Bank of Telugu people, Andhra Bank is merged with Union Bank. Why this step motherly treatment ?
Consolidation is not a big reform. It is only a distraction from real solution. On one side, economy is facing difficulties. On the other side such a large scale disruption is planned. Is it right time? Unfortunately, Banking sector was not given proper attention in NDA Government. In the last 5 years, Finance Minister , then and now, do not have grip on the Banking sector. It was left to bureaucrats which made the sector further worse. It is the sorry state of affairs. An economist preferably expert in Banking should be exclusively made incharge of Banking sector. Such a big financial system should be headed by exclusively Banking Minister. It may be one alternative to have better monitoring.