MUMBAI: India’s biggest bank overhaul in decades may hurt the nation’s bad loan clean-up and slow the lending approvals needed to reverse its economic slump.
Prime Minister Narendra Modi’s government late Friday surprised observers by announcing several state bank mergers, a move it said would create larger, healthier lenders. While that may be true in the long term, analysts predict that the efforts may be hurt by a near-term shift in management attention to aligning resources such as personnel, technology and branch networks.