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Journalism of Courage
Finance minister P Chidambaram said today that banks must consolidate if they are to keep pace with the current changes and move forward. Speaking at a function to mark the opening of the 1,000th branch of Vijaya Bank, he said there is an opposition to consolidation in banking circles, but if banks have to compete in a complex world, the only way is through the inorganic route.
“The only way to grow is inorganically, by consolidating and picking up other banks. This has to happen in banking circles and there is no other choice. Consolidation is the way of future,” Chidambaram pointed out. He also urged banking staff not to resist the change that will come about and be prepared for a new kind of organisational structure. “Everybody will have to become multi-skilled and organisations will become flat,” he said.
Chidambaram said India’s biggest strength is its abundance of human resources and in about 15 years the country will be the third largest economy in purchasing power parity. “Our strengths will be our size, ability to dream big, capacity to build world scales. What is holding us behind is our past and the baggage of the past is too heavy,” he said. “Take that baggage off our shoulders, put it away and sprint ahead.”
He said it had taken Vijaya Bank 50 years to open 500 branches and half that time to open the next 500.
