Need More Consolidation in Financial Services: Former RBI DG Rao

Former RBI Deputy Governor S. S. Mundra Rao (often referred to as Rao in discussions) has emphasized the need for greater consolidation in India’s financial services sector to enhance stability, efficiency, and global competitiveness.

He highlighted that the industry remains fragmented, with a large number of small and mid-sized players struggling with capital constraints, governance issues, and technological challenges. Consolidation through mergers or strategic alliances can help institutions achieve economies of scale, improve risk management, and strengthen balance sheets.

Rao also pointed out that larger and well-capitalised entities are better equipped to handle regulatory requirements, adopt advanced technologies, and compete in a rapidly evolving financial ecosystem. This becomes even more important as digital transformation, fintech competition, and global integration reshape the sector.

At the same time, he cautioned that consolidation should be well-planned to avoid systemic risks and ensure smooth integration of operations. Regulators will play a key role in facilitating such transitions while safeguarding financial stability.

Overall, the call for consolidation reflects a broader vision of building a stronger, more resilient, and globally competitive financial services industry in India.

Source:https://www.financialexpress.com/business/news/need-more-consolidation-in-financial-services-industry-former-rbi-dg-rao/4177277/