Smaller public sector banks will be mentored by big brothers for smooth transition before consolidation

The government is going forward with its plan to $4 two or three $4 and turn them into a single entity.

But before this merger plan, the large banks are going to handhold the weaklings for 6-12 months before acquisition.

In a bid to turn public sector banks into profitable lenders, $4 had announced a committee to look into the merger of the state-run banks.

The committee discussed various plans towards.

"The expert committee will give its recommendation in six months. Once we have a plan, we may ask the lead bank in some cases to take over as mentors of smaller entities and work out the irritants over a period of another six months or so," a government official told ET.

The bankers also backed the consolidation plans but the finance ministry also said the merger should not lead to creation of another $4.

"Merger in PSBs will involve a lot of external factors including HR issues and unions. A brief period of handholding will help to allay fears and lay preparatory grounds for eventual merger," the above quoted official told ET.

(Image: Indiatimes)