‘Anchor bank for PSB consolidation put on hold’

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‘Anchor bank for PSB consolidation put on hold’

News:

  1. The concept of having 5-6 anchor banks and consolidate weaker banks with them put on hold.

Important facts:

  1. Culture is the major hurdle in integration, emphasized by Canara Bank chairman, T.N. Manoharan.
  2. T.N. Manoharan also opines that turning of loan to big infrastructure projects to bad loan is real cause of NPA
  3. It is contrary to public perception that bad loans are due to wilful defaulters and indiscriminate lending’
  4. T.N. Manoharan also supported the idea of bad bank.
  5. Classification of banks into three categories mooted:
    1. Universal Banks: Does all kinds of banking, including corporate lending.
    2. National Retail Banks: would focus only on retail lending.
    3. Regional retail banks.
Anchor banks:

  • Anchor banks are public sector banks that will drive the consolidation process among the state owned banks.
  •   Consolidation among PSBs has been under discussion from the last one decade.
  •  However, bankers had opposed the idea of consolidation among PSBs on the ground that the financial health of the most of banks had detiorated.
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