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Deep divide on bank merger

New Delhi, June 13 (PTI): Punjab National Bank chairman and managing director K. C. Chakrabarty today said the time was not ripe for consolidation in the banking sector, a view contrary to that expressed by the government.

“The time is not ripe enough. It (consolidation) will take two to three years more and before that we must make banking services available and accessible to every individual; then we can talk of consolidation,” said Chakrabarty, who will take charge as the RBI deputy governor on Monday.

Earlier this week, finance minister Pranab Mukherjee had said, “Public sector banks should look at consolidation as a serious option in order to reduce risk to financial stability and to face competition.”

However, Chakrabarty said consolidation was essential if Indian banks were to reach world-class efficiency.

“Financial inclusion is more important than consolidation. First bring the financial inclusion; after three to four years we (can) talk of consolidation,” said Chakrabarty, who headed the country’s second-largest public sector bank for two years.

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