The powers of RBI for effective resolution of regulated entities from this perspective need enhancement. Mergers Voluntary mergers and transfers help consolidation in financial sector and pave the way for stronger financial institutions to rescue the weaker ones. Such voluntary measures, while saving the constituents of weaker institutions, provide business opportunity to the stronger ones to spread their presence in different geographies.
The BR Act empowers RBI to sanction a scheme for voluntary amalgamation of banking companies. However, such a power is not available with respect to cooperative banks.