India seeks advice on banking consolidation

Finance Ministry has requested public sector banks' counsel on the move despite RBI's adverse stand.

The finance ministry has asked the top five public sector banks to come up with ideas on banking consolidation by the end of the current fiscal year, according to the Economic Times.

They have been asked to submit a detailed road map and also do the due diligence of the smaller banks they could acquire.  
 
The move comes even as the Reserve Bank (RBI) has indicated its adverse stand on consolidation in public sector banks. According to a senior finance ministry official who did not wish to be named, banks have been given broad guidelines under which they should assess compatibilities and synergies.  
 
The government may appoint consultants and chalk out a road map if the banks fail to come up with their views by the deadline. "It'll still be a consultative process, but we hope that banks will come up with their own strategies," a finance ministry official said.