With a view to becoming more competitive, the public sector banks (PSBs) should consider mergers as a ''serious option,'' Finance Minister Pranab Mukherjee said here today.
''The PSBs should look at consolidation as a serious option in order to reduce risk to financial stability and to face competition. Any consolidation initiative in the banking sector would be viewed positively and the government, as a majority shareholder, would continue to play a supportive role in this process,'' Mr Mukherjee emphasised after meeting the heads of the state-run Banks.
In the meeting, it was discussed that as a result of various pro-growth measures announced by the government and the RBI; there are expectations about achieving a fairly decent growth in the current fiscal.
The overall business of PSBs, including the advances, grew by about 26 per cent during 2008-09 at a time when the credit growth of both private sector banks and foreign banks was declining and resources from non-bank financial resources were contracting.
During FY09, the net profit growth of the PSBs showed a robust growth of 27 per cent, according to an official statement.