The Central Government is very keen to merge banks and as a first step, the associate banks of the State Bank of India  are sought to be merged with the SBI.  This is outright a stupid and unwanted move.

Firstly, more competition is possible only when there are more banks.  The private sector banks like Karur Vysya Bank, Lakshmi Vilas Bank and so on are giving the big public sector banks a run for their money, through superior customer service.  Hence, merger will only create a huge monolith kind of edifice that is bound to become more complicated.

Secondly, there are huge manpower issues such as seniority, the skill level and so on, and each of these will further complicate matters.  Demotivation is bound to occur.  Thirdly, customers cannot be assured that they will get superior customer service only because the banks are merged.  Fourthly, it is a big task to manage such a big bank. 

The Government should stop this practice of merging banks.

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