India should make efforts to consolidate banks in such a manner that a few big banks of equal size would be created, without compromising market competition in the industry, the Economic Advisory Council to the Prime Minister (EAC-PM) said in a working paper.
The paper titled ‘Reforms, Efficiency, and Productivity of Indian Banking Sector in the Last Decade : A DEA Approach’ further said this will help support the growing credit need of the economy as India strives to be Viksit Bharat by 2047.
“Though the concentration in the Indian banking industry is low, the market share of the banks varies significantly, starting from 20 per cent to below 1 per cent.
“In this context, India should make efforts to consolidate the banks in such a manner that a few big banks of equal size would be created, without compromising market competition in the industry,” the EAC-PM said.
The paper noted that the bank consolidation was intended to create institutions with stronger capital bases, wider …
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