In the recent past, a lot of consolidation in the form of mergers of various Public Sector Banks(PSBs) has been witnessed. It has been undertaken to have only a few PSBs. What are the experiences in this context in other developing nation.
Having been in the Banking System for over 35 years, I can say with confidence that this argument is a fallacy!
The discussion should go on..............with experiences from other nations
EXIM Banks can provide different dimensions to structured trade and finance in developing countries. An export oriented economy can benefit greatly if public sector bank can be established to assist exporters enhance their ability to meet their contractual obligations provided there are appropriate safeguards such as irrevocable letters of credits or export guarantees. Barriers of entry might also force otherwise entrepreneurs to shelve off plans to set up huge factories if they cannot secure funding for importation of machinery and other materials. Public Sector Banks can be handy provided meaningful project appraisal systems are in place and are followed.
An interesting question, I am not an expert to opine on the issue. As a layman, I disagree to any attempt of limiting banking sector.
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