BANKING AFFAIRS

Detailed explanation-1: -The finance minister of India, Mr Arun Jaitley is the committee head of the merger of the public sector banks. This committee has other ministers like railway minister of India and coal minister and defence minister. It was built to move ahead with the reforms in the public sector space.

Detailed explanation-2: -Consolidation of public sector banks not impacted their outreach or inclusive banking efforts, says RBI Deputy Guv Rao. The genesis of financial sector reforms in India could be attributed to the recommendations of the Committee on the Financial System chaired by M Narasimham in 1991.

Detailed explanation-3: -From the 1991 India economic crisis to its status of third largest economy in the world by 2011, India has grown significantly in terms of economic development, so has its banking sector.

Detailed explanation-4: -The banks that were merged include Punjab National Bank, which merged with Oriental Bank of Commerce and United Bank of India; Canara Bank’s takeover of Syndicate Bank; Union Bank, incorporating Andhra Bank and Corporation Bank; and Indian Bank, which merged with Allahabad Bank.

Detailed explanation-5: -Since both assets and liabilities of all the banks in question are merged, acquisitions help banks strengthen their balance sheets. It would ultimately help nullify the Non Performing Assets (NPA) of smaller PSU banks in India.