Overview
- Finance Minister Nirmala Sitharaman said work has begun with the RBI and lenders on creating larger banks to support growth and infrastructure financing.
- Pathways under discussion include fresh public sector bank mergers, new institutional forms and selective privatisation, which she said would not hurt financial inclusion.
- Operational directives accompanied the structural push as she urged local‑language staffing, in‑house credit assessment and simpler paperwork to restore a human touch.
- Bank unions and civil society pushed back, with UFBU demanding assurances against privatisation and more capital for PSBs, and BBDBM defending nationalisation’s inclusion gains.
- Context remains fluid with no decisions announced, as prior mergers cut PSBs from 27 to 12 and IDBI divestment steps advanced, while the DFS secretary said India will still need more banks by 2047.