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    ISAS Insights

    Detailed perspectives on developments in South Asia​​

    Bank Consolidation: Necessary but Inadequate

    Dipinder S Randhawa

    15 October 2019

    The consolidation of public sector banks is a much-needed step. However, the problems facing banking in India – ineffective governance, pervasive intervention by politicians in lending decisions, and an inability to resolve the mounting volume of non-performing loans – are much more severe and cannot be tackled through bank mergers alone. Public sector banks in India need deeper structural reforms to help revitalise growth in the economy.