Important Topics for UPSC 2017 Exams (Banks Merger)
What is meant by the merger of banks?
It means that 2 or more banks are combined to form a larger bank to address common problems and increase resources to lend larger loan amounts.
Why current merger of SBI and its associates?
- It will make SBI one among 50 global banks.
- SBI will be able to lend in abroad projects.
- It is expected to improve the efficiency and service delivery of Public Sector Banks.
- The charges on cross-bank ATM usage would reduce considerably.
- Reduce NPAs of associate banks and it will not reflect much into SBI balance sheet.
- To have strong banks than the numerically large number of banks.
- Customers of smaller banks will get access to wider use of financial instruments like mutual funds and insurance products, as offered by Big Banks.
- The sharing of Infrastructure will give customers a wider use of the ATM network.