Government will support public sector banks to merge if they wanted, provided they fulfilled Reserve Bank in India (RBI) and Sebi guidelines, finance minister Pranab Mukherjee said today.
"If someone decides to merge, if we see it is in conformity with our policy and if we find that parameters are being followed as per the SEBI and RBI guidelines", then government would play a "supportive role", he said in reply to a calling attention in the Lok Sabha.
Maintaining that the government has itself not taken any initiative to ask public sector banks to go for merger, he said it did not intend to interfere in their routine financial activities.
"The current policy of the government on consolidation leaves the initiative for consolidation to come from the management of the banks themselves, with the government playing a supportive role as the common shareholder," he said, asserting that no directive on consolidation was being issued by the government or the RBI.
The boards of the banks have to take a decision in this regard "based on the synergy levels of merging or consolidating entities", he said.
The calling attention motion was moved by CPI leader Gurudas Dasgupta who asked whether the government had taken any initiative "overtly or covertly" to merge various public sector banks resulting in "discontent" amongst the bank employees.
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