Why not allow banks to buy branches?
By V.K. Dwivedi RBI has prepared a blueprint for detecting and dealing with impending bank failure. It has decided to propose mandatory provisions for the liquidation or merger of banks as and when they reach the point of no return. The merger of the banks on business considerations is always welcome as it is happening worldwide but to thrust upon such ideas on the banks would be unprofessional and defeat the very purpose of reforms. The banks should be left free to take such decisions. Instead of going in for mergers & acquisitions, banks should, to start with, think of buying branches. It sounds crazy at the moment but it has lot of advantages. In certain small towns, say with a population of around 10,000 to 15,000, three to four banks are operating which make their operations less remunerative. During the seventies and eighties, most of the commercial banks opened branches in remote areas, where they did not have much presence. Such branches were opened either under government pres
