The finance ministry has appointed SBI Capital Markets to prepare two reports on mergers and consolidations in public sector banks as well as recapitalisation of these lenders.
“We have asked SBI Caps to do a study… I hope within a month or so we will be getting something,” said GS Sandhu, secretary, department of financial services on Thursday.
He said that the government is yet to receive an concrete proposal on bank mergers and said that banks will begin tapping the capital markets to raise funds for re-capitalisation after October.
“It is more likely to happen in tranches based on the requirement of funds. We will go to the Cabinet. We will take a nod from them. This is the way we want to go ahead,” he said. Banks require Rs 2.4 lakh crore over a three year period to meet capital requirements under Basel III norms. The Budget has allocated Rs 11,200 crore for capital infusion in state-owned lenders this fiscal. On bank mergers and consolidations, he said, “No formal decision has been taken but many suggestions are coming. One, of course, the State Bank of India with one of their subsidiaries. We are working on that.” Discussions have been on for long to merge subsidiaries of SBI with the parent bank.