Though our banking sector could boast of adhering to the international best practices with respect to income recognition, asset classification and provisioning, when it comes to the strength and size of the banks, we have a long way to go.

Worldover consolidation takes place in any sector to im-prove the efficiency and to compete effectively with other players in the domestic and international market. Since globalization is the in-thing, entities have to visualize their future course of action in the backdrop of global canvas. Globally, many bank mergers have created shareholder value. Every big player operating today has grown through merger and acquisition. In fact, every large bank in the world is big because it had acquired repeatedly and integrated well. A review of the international banking scenario over the past decade reveals that consolidation has been a dominant feature of the banking sector in most countries. In countries like Malaysia, Singapore, Taiwan, Thailand, Indonesia and South Korea, the governments have supported consolidation process among the banks. These countries are keen to build national champions that can at least obtain big banks in the Asian region. Experiences reveal that Malaysia had reduced the number of banks from 55 to 10 and Singapore government guided the banking system to have three banks, with DBS being supported to become a regional leader in the country.

Consolidation takes place to increase the size of the capital of banks. Some of the developments in the banking sector in different parts of the world provide the following interesting facts.

The Analyst Magazine, Globalization, Global Canvas, Merger and Acquisition, Market Capitalization, Internal Operations, Reserve Bank of India, RRB, Financial Inclusion, Securities and Exchange Board of India, SEBI, Global Financial Turmoil, Regional Rural Banks, RRB, Banking Sector Reforms.