“The alternative mechanism will give in-principle approvals to proposals of banks for their amalgamation,” said  Union Finance Minister Arun Jaitley.

As per the latest developments, the members of the mechanism will be finalised by the Prime Minister and are also expected to include Jaitley and Minister of Road                                                                                               Transport and Highways Nitin Gadkari.

Apart from the State Bank of India (SBI),  there are 20 public sector banks, at present.

Finance Minister said that the Central Government is not targeting any fixed number of mergers. He ensured that this practice will help in the development of strong and competitive banks.

The final decision on the merger will be taken on the basis of commercial consideration of the board of the banks involved.

“After getting in-principle approval, the banks will take steps in accordance with law and SEBI requirements. The final scheme will be notified by Central Government in consultation with the Reserve Bank of India,” said an official communique.