Mergers could be fruitful for smaller banks so they can increase their scale and expand into new product lines. The recent financial crisis has reopened debate on the scale and scope economies in the context of big banks being too big to fail. For instance, Nobel laureate, John Vickers clearly advocated splitting large UK banks to combat the problem of too-big-to-fail.
In US too, some regulatory features have been added through the Dodd-Frank Act to increase the social utility of the largest, most complex financial firms. In India, most banks that operate are as yet not of a global size. They are not big enough to be competitive. So our problems are different.