As a part of managing large NPAs, some suggestions have been made that perhaps a consolidation of PSBs can render them more capable of managing such challenges relatively better. The basic argument is that a large bank will have been well capitalised, will have deeper expertise to handle large credits and large NPAs and hence can ride off troughs with relative ease. 18.
It has to be ensured that mergers among two banks should not be seen as a fix to short term problems as being faced by certain PSBs. Merger may be useful only if it has strategic vision driven by synergy and creating value for both the banks.