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India's Top 6 Public Sector Banks Are Getting Fitter
Sep 3, 2019

How do you decide the best match amongst FM Sitharaman's latest matchmaking of PSU banks?

Needless to say, most investors would be worried about the level of NPAs and current and savings accounts (CASA) of the merged entities.

Lower NPA ratio and sustenance of high CASA, in the future, could signal the banks' fitness levels to lend more.

But what could go unnoticed is the efficiency potential of the merged entities.

Post merger, the employee per branch ratio of the consolidated PSU entities could be in the range of 7 to 9 per branch. This would be almost half that of their private sector counterparts like HDFC Bank and Kotak Bank.

Leaner operations would mean use of technology to support growth.

So, I would not be surprised if the PSU entities leverage technology at a much bigger scale than their private sector peers, in a few years.

This Chart Of The Day was published in The 5 Minute WrapUp - Should You Cheer Fit India or Worry About 5% GDP Growth?

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