The Reserve Bank of India (RBI) feels there should be at least four to five large banks in the country to prevent monopolistic market power.
"Presently, (there is) significant skewness in the size of banks. The second largest bank in the system is almost one-third the size of the biggest bank. This creates a monopolistic situation," D Subbarao, governor of RBI, said during his speech at the FICCI-IBA Annual Banking Conference here today.
State Bank of India (SBI) -- the country's largest lender -- is aiming to expand its size further by merging its subsidiaries. SBI has already merged two of its associate banks – State Bank of Saurashtra in 2008 and State Bank of Indore in 2010. SBI plans to merge one more subsidiary in the current financial year.
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