We should urge and persuade the respective Treasuries to contain their financing gap within sustainable levels and to emphasise more on efficiency and productivity of the public sector.
Admittedly, larger banks offer certain benefits such as economies of scale in operation and capacity to finance large infrastructure projects which are typically considered more risky. In India, we also need large banks with potential capacity to become significant global players. Nevertheless, we have to balance the benefits that large banks extend with the moral hazard costs they entail.