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Budget 2021: Will it bring revolutionary changes into banking and financial sector?

The Minister of Finance requires a budget every 100 years. Could revolutionary changes occur in the banking and financial sector? Now one of the cobwebs of the banking sector is the legacy of nationalized banks.

One expectation is to reduce the number of public sector banks from 12 to 4. It has already been reduced from 27 to 12 through mergers.

"Focusing only on budget consolidation would be disappointing," said Ananth Narayan, a professor at SPJIMR .

According to him, public sector banks (PSB) require a lot of changes in terms of operating freedom, among other things.

"Operational freedom is a point," Narayan said, "governance reform is needed across the entire ecosystem, be it non-financial banks, private sector banks or public sector banks."

Meanwhile, NS Vishwanathan, former Deputy Governor of the Reserve Bank of India (RBI), said: "I have been an advocate for consolidation in the public sector banking arena."

“The challenge in consolidation is how to deal with different platforms of shared banking solutions, but it is not a problem for me, but the inefficiency of a large number of institutions owned by the same owners that compete with each other for the same pie is much more problematic. We seek further consolidation, which could also be interspersed with perhaps one or two privatizations.

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