India, Dec. 23 -- At the 12th SBI Banking and Economics Conclave in November 2025, Finance Minister Nirmala Sitharaman said that the country needed big and world-class banks, and that discussions were on with the RBI in this regard.

That was the first official indication of the possible merger of public sector banks (PSBs), on which the official stance remains a "no immediate mergers". Consolidation of PSBs has been going on for some time. India has already seen two major waves of mergers of PSBs: first, the SBI absorbed its associate banks in 2017, and then in 2019, 10 smaller lenders were merged into 4 larger entities, reducing their total number to only 12 from 27 in 2017.

The proposed plan, still speculative, by all indications, wou...