India’s finance minister: Government to sponsor banks merger

Indian government ensures its support provided that public sector banks would meet regulators' guidelines.

Finance Minister Pranab Mukherjee in his reply in the Lok Sabha to a call-attention motion said that the government did not take any steps for the merger as it did not intend to get into routine financial activities.

He then said the Union Government will support the merger of public sector banks as long as they comply with the policies of the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI), according to a report in RTT News.

As per the current policy, the government left the initiative on consolidation to the managements of the respective banks, and would play a supportive role as a common share-holder, he said.

The minister assured that the interests of the stake-holders, including the employees of merging banks and customers, would be fully protected.