Consolidation – In the normal course of operations banks would be constantly looking for opportunities of inorganic growth. Banks which operate with capital above the minimum levels have an edge over the other banks to the extent that they would be able to seize an opportunity for merger / acquisition as and when it is available without any loss of time.
However, it would be necessary for such banks to improve their internal controls and risk management systems before embarking on a path of inorganic growth. Basel II implementation would enable banks to meet the above pre-requisites and place them in a situation where they can take advantage of opportunities as and when they arise.