Bank Consolidation and the Transformation of Public Sector Banking in India: A Contemporary Perspective on Business and Organisation

Abstract

Abstract

Bank consolidation in India has moved beyond the traditional objective of rescuing weak institutions and increasingly become an organisational and strategic instrument for building scale, resilience, technological capability and competitive capacity. This article revisits the merger perspective of Indian bank mergers and extends the discussion to the contemporary public sector banking environment. Particular attention is given to the post-2017 consolidation programme, organisational integration, business-process redesign, digital transformation, risk governance, human-resource management, customer relationships and managerial challenges. The evidence indicates that consolidation can create scale and improve the capacity to deploy technology, capital and specialised capabilities, but merger itself does not automatically generate efficiency. Integration costs, overlapping processes, employee adjustment, cultural differences, technology migration, customer retention and the management of acquired credit exposures can delay or offset expected synergies. Recent official data show a substantial strengthening of public sector bank profitability, asset quality and capital adequacy. The article therefore argues for evaluating contemporary bank mergers not only through conventional financial ratios but through a broader organisational-performance framework covering operating efficiency, digital capability, human capital, customer experience, risk management and strategic adaptability.