The government has been hinting at the need to consolidate PSBs into 4-5 big banks to achieve scale and a global competitiveness. It also has a vision to achieve "Viksit Bharat" which requires the bank consolidation plan to happen soon.

Govt to convene two-day banking reform meet; PSB consolidation likely on table – Sources

CNBCTV18·author

Published Sep 10, 2025 | 5:57 AM GMT-04

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The government will hold a two-day “Manthan” meeting with public sector banks (PSBs) on Sept. 12-13 after a gap of over two years for a wide-ranging exchange of ideas on further banking reforms, sources told CNBC-TV18.

The formal agenda is expected to cover the future roadmap for PSBs, use of AI, governance, asset quality and customer satisfaction. The conference will also see participation from consulting firm McKinsey & Co. and RBI Deputy Governor Swaminathan J.

When asked specifically if some discussion is likely on the next round of bank mergers, “Many issues are likely to be discussed over the 2 day summit," a source told CNBC-TV18.

CNBC-TV18 had reported in July that India needs bigger banks and further consolidation in PSBs is not ruled out. Sources had also indicated India’s banking sector needs capital , and one of the way to do that would be to probably raise the foreign direct investment (FDI) cap in PSBs. The government could revive or flesh out some of this thinking. If discussions progress, the upcoming budget could include significant announcements for state-run banks.

India to Hold Two-Day ‘Manthan’ Meet with PSBs on Sept 12-13, May Discuss Mergers – Sources

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