At least 2 Indian banks should be in global top 20: PSB chiefs

Batting for further consolidation in public sector banking, the executives of top public sector banks (PSBs) said there should be at least two Indian banking entities among the top 20 global banks.

- BS REPORTER

The growing needs of the country, which is eyeing to become a developed nation by 2047, make it imperative to have many large-size banks.

The state-owned banks with a healthy profile, marked by a comfortable capital base, robust asset quality and enhanced quality of operations, are best-placed to engage in further consolidation. Banks are more confident to manage mergers and amalgamation on the back of effective consolidation in the PSB space that happened during the pandemic in 2020, the bankers said during a session 'Does India need big banks', moderated by Manojit Saha of Business Standard.

Ashwini Tewari, managing director, State Bank of India, the country's largest lender, said: "PSB consolidation is a decision for the government to take. There is a case for large banks. There can be niche banks, which are sector or community oriented. India should have at least two banks in the Top 20 globally."

Seconding SBI's argument for larger banks, Asheesh Pandey, MD & CEO, Union Bank of India, said, "Banks need strong balance sheets to underwrite big projects. This coupled with the de-dollarisation trend will drive the need for big banks."

Earlier, banks were dealing with projects with loans of ₹800 crore-₹1,500 crore, and now they are underwriting projects with sizes in the region of ₹8,000 crore-15,000 crore, he added.