Merger process major challenge for PSBs in near future: SBI Chairman

State Bankof India chairman Rajnish Kumar on Thursday said one of the major challenges for public sector banks in the near future is the merger process.
In August last year, Finance Minister Nirmala Sitharaman had announced merger of 10 banks.

Kumar said banks that are in the middle of the merger process need to be careful on information technology integration.
"One of the challenges before public sector banks in the near future is the merger of the bank...IT merger needs to be handled very carefully," Kumar said at an event organised by Indian Banks' Association.
In April 2017, SBI had merged its five associate banks- State Bank of Bikaner and Jaipur, State Bank of Patiala, State Bank of Travancore, State Bank of Hyderabad, State Bank of Mysore.
The four new set of proposed mergers included Punjab National Bank, Oriental Bank of Commerce and United Bank of India will combine to form the nation's second-largest lender; Canara Bank and Syndicate Bank will merge; Union Bank of India will amalgamate with Andhra Bank and Corporation Bank; and Indian Bank will merge with Allahabad Bank.
These mergers will bring the number of state-run banks to 12 as against 27 in 2017.

Bank unions call two-day strike from Jan 31 after wage revision talks fail

Bankunions on Wednesday called for a two-day nationwide strike on January 31 and February 1 after talks over wage revision failed to make headway with the Indian Banks' Association (IBA).
The United Forum of Bank Unions (UFBU), which represents nine trade unions, said they will also hold a three-day strike from March 11-13.

"From April 1, we have decided to go on an indefinite strike," UFBU state convenor Siddartha Khan told PTI.
UFBU is seeking at least a 15-per cent hike, but the IBA has capped the raise at 12.25 per cent, he said.
"This is not acceptable," Khan said.
The last wage revision meeting was held on January 13.

RBI unexpectedly hits pause on rate cut; lowers FY20 GDP forecast to 5%

The Reserve Bankof India on Thursday unexpectedly hit a pause button on cutting interest rate as it gave more importance to prevailing inflation pressure and rising food prices over a worrying slowdown in the economy.
After five consecutive cuts in interest rates this year, the six-member Monetary Policy Committee (MPC), headed by RBI Governor Shaktikanta Das, unanimously voted to hold the key repo rate at 5.15 per cent and reverse repo rate at 4.90 per cent.

Bankers and economists had widely expected the central bank to cut rates for the sixth time to support a slowing economy, whose growth rate slipped to a six-year low of 4.5 per cent in the September quarter from 7 per cent a year back.
The RBI reiterated that it would maintain an accommodative stance as long as necessary to revive economic growth but cut its GDP growth forecast to 5 per cent for the 2019-20 fiscal from the earlier estimate of 6.1 per cent.
Das said the pause was temporary and the central bank wanted to assess the effect of its policy after reduction of 135 basis points in five policies this year.
Banks have passed on only 44 basis points of the rate cuts to borrowers, he said.
"There is space available for further monetary policy action," Das told reporters here, adding that there is a need to "maximise the impact of rate reductions".
According to the RBI, the need at this juncture is to address impediments, which are holding back investments in the economy.
Das said the central bank cannot "mechanically" keep cutting interest rates every time and that it will wait for the impact of the coordinated measures taken by the government and the RBI over the past few months to push growth to play out before taking a call on rates.
While there are green shoots in the economy, it is too early to take a call on their sustainability, Das said.
The recent measures initiated by the government will help to revive sentiment and spur domestic demand, which is being blamed as prime reasons for the slowdown, he added.
Further, Das said there is good coordination between the fiscal and monetary policies so far in addressing growth concerns and that the RBI is not worried about government missing fiscal deficit target.
"The MPC recognises that there is monetary policy space for future action. However, given the evolving growth-inflation dynamics, the MPC felt it appropriate to take a pause at this juncture," the MPC said in a statement.
Das said this was a "temporary pause" in the interest rate cutting cycle and the MPC will be better placed to decide on it in February after more data comes in and the government brings out its Budget for 2020-21.
"Let the impact of 135 basis point cut play out more," he said and emphasised that timing was important rather than mechanically cutting rates.
Stating that headline inflation at 4.6 per cent in October was "much higher than expected," the central bank raised upwards its inflation forecast for the second half of the fiscal year to 5.1-4.7 per cent from 3.5-3.7 per cent seen previously.
For the first time in more than a year, inflation in October breached the RBI's 4 per cent medium-term target. This was primarily due to uptick in prices of vegetables such as onion and tomatoes, Das said.