Merger of Public Sector Banks in India: A way of Sustainable Financing and Investing

Abstract: Majority of banking business in India is still done by the public sector banks. However, there is a decrease in the performance of public sector banks during the first decade of 21st Centuries due to competition from private and foreign banks. Some of the small “public sector banks” were not ready for competition from highly structured banking business of private sector banks. Hence, they were unable to manage their NPA and struggle to report the profit. Accordingly, government has adopted Merger and Amalgamation strategy to solve the problem of public sector banks. In this article it is found that financial performance of PSB has improved after merger and created sustainable financial structure through stronger Indian banking sector. Keyword: NPA, Public Sector Banks, Merger and amalgamation strategy