Overview
- The finance minister said work has begun and that the government is in consultations with the Reserve Bank of India and commercial banks.
- Officials are exploring multiple paths to scale, including mergers among existing lenders and the creation of new institutions.
- No final policy decisions or specific consolidation transactions have been announced.
- Earlier waves of public sector bank mergers reduced state-run lenders from 27 to 12, and SEBI’s August reclassification of LIC at IDBI Bank enables a strategic sale.
- Sitharaman urged in-house credit assessment, simpler processes, and local-language staffing, while backing a soft-touch approach to AI oversight with RBI and NITI Aayog.