Bank mergers, reforms show Govt’s resolve to revive growth: India Inc

Bank mergers, reforms show Govt’s resolve to revive growth: India Inc

Agency News

New Delhi, Aug 30: Mega mergers in public sector banks, reducing their number from 27 to 12, announced by Finance Minister Nirmala Sitharaman on Friday along with major governance reforms are a pointer towards the government fixing the issues of the sector with a resolve to take India's economy to USD 5 trillion by 2024, ASSOCHAM President B K Goenka said.

Mr Goenka said the consolidation of this size has been unprecedented in the Indian banking sector and what gratifies is the fact that it is being achieved seamlessly without causing any disruption to the customers or to the financial markets as the compatibility of the technology platforms among the merging banks is being taken care of.

The ASSOCHAM President said these mergers would result in better banking to customers, more credit to the industry and agriculture, professional governance structure and a greater autonomy and accountability of the bank boards. Besides, the flexibility to hire professionals like Chief Risk Managers at market -determined remuneration would make a lot of difference to the risk mitigation and clean banking.

He said the back-to-back measures announced by the Finance Minister today and the week before also reflect the resolve of the government to address the concerns over slowdown in the economy. With package being worked out for the real estate and the home buyers of the stalled projects, there would be further improvement in the sentiment, Mr Goenka said.

ASSOCHAM Senior Vice President Dr Niranjan Hiranandani said industry has felt reassured by the Finance Minister's assertion that the Rs 70,000 crore re-capitalisation being provided to the banks would be used only for credit growth and not any other purpose.

Dr Hiranandani said as Mrs Sitharaman had stated earlier, this amount should result in additional liquidity of Rs 5 lakh crore, providing growth momentum to several critical sectors of the economy - real estate, automobile, consumer durables, highways construction and other infrastructure projects.

Established in 1920, ASSOCHAM (Associated Chambers of Commerce and Industry) has in its fold over 400 Chambers and Trade Associations, and serves over 4.5 lakh members across India. (UNI)