Rajeev Kumar, the Finance Secretary, signified the government's decision to consolidate 10 public sector banks into four mega state-owned banks. This will help the economy of India to achieve the $5 trillion target. The unification of the banks would create a strong and competitive banking system. The banking system would assist the people of India better by providing better lending capacities, better technology with a wider outreach.

WATCH: Public Sector Bank Mergers Announced: 10 PSBs Become 4; 12 Remain

 'To support next level of growth, the country needed big banks. The mega-merger announced on Friday aims to achieve that objective. We will now have six mega banks with enhanced capital base, size, scale and efficiency to support high growth that the country requires to break into club of middle income nations,' Kumar said in an interview. 

When asked about the future, Kumar confidently stated that the government envisages a 'technology-driven, clean, responsive' bank sector. Kumar further elucidates notifying that the Centre wants to provide 0.25% higher capital than required to keep in mind their status domestically. Furthermore, the Indian banks currently have 1% higher core capital requirement than Basel III norms. According to Kumar, the state-owned banks can now look forward to efficiency, better service to the customers and more opportunities for the employees. 

READ: Public Sector Bank Mergers Announced: 10 PSBs Become 4; 12 Remain

Rajeev Kumar on the merger 

When asked about the date of the merger, Kumar notified that it would be decided after a consultation with the boards of the banks in question. In the course of the entire process, the credit growth will not be abrupted. Kumar further stated that the customers will face no issues whatsoever as a result of the merger. He gave the example of Bank of Baroda to cite an incident of a similar merger. 

'There is a process which needs to be followed. There are some regulatory approvals which are required. Banks have sufficient time for charting out smooth and seamless amalgamation date. It could happen from January 1 or April 1 depending on their readiness. It would not be later than April 1,' The Finance Secretary asserted. He further added, 'We wanted to do it one time, give the road map and remove the uncertainty. Now there is no uncertainty and road map is all clear. Governance reforms done. Who wants to give their power, we have given it. Even in appointments we have given it. Now it is completely professionalised.' 

READ: 18 Things Former RBI Governor Raghuram Rajan Said Should Be Done To Tackle NPAs And Other Indian Banking Sector Woes

Public sector banks merger, Nirmala Sitharaman assures no loss of jobs

Finance Minister Nirmala Sitharaman had earlier dispelled doubts of individuals losing their jobs as a result of the merger. She assured that not one single employee will lose their job as a result of the merger. Sitharam had divulged into the consolidation of the banks on August 30 to reveal the initiative to create fewer and stronger global-sized lenders. To end the stagnation, the government has proposed the merger of public sector banks to boost the economy.

WATCH: Nirmala Sitharaman: Bank Merger Won't Lead To A Single Job Loss