Merger as the last resort: A case study of State Bank Of India

The financial sector in India is predominately a banking sector, with commercial banks accounting for more than 64% of the total assets held by the financial system. The sector has witnessed robust growth with the introduction of several reforms by the government of India and the RBI, to liberalise, to regulate and bring innovative structures like payment banks, to the Industry (Wadhwan, 2017). The new private sector payment banks and small finance banks will roll-out during 2017 (Rodrigues, 2017). As India will be headed for a full-blown banking crisis, thus, banking in India is going through massive changes, by low-value transactions are going digital, led by mobile wallet companies. Moreover, the Indian banking system consist of 26 public sector banks (PSBs), 25 private sector banks, 43 foreign banks and 56 regional rural banks. The PSBs control nearly 80% of the market. Furthermore, Indian banking industry has recently witnessed the roll-out of innovative banking models like 11 payments and 10 small finance banks during financial year 2015–16 (Gupta and Bansal, 2017).