PSU Banking stocks rallied ahead of the 2 day Gyan Sangam meeting with stocks like Syndicate Bank, Punjab National Bank, Andhra Bank and Bank of India among the gainers
Mergers and acquisitions of PSU banks will be a major theme at the two-day 'Gyan Sangam' on January 2-3, a retreat of chiefs of financial institutions which will be attended by the Prime Minister, Finance Minister and Reserve Bank Governor.
At the retreat, there will be sessions by prominent experts, including global consultancy firms, group discussions, sharing and demonstration of best practices and technologies.
The retreat will end with presentation of a draft action plan to Prime Minister Narendra Modi on the second day.
The Prime Minister will interact with chiefs of financial institutions at the retreat, which is being organised to find out "what has gone wrong and what should be done both by banks as well as by the government to improve and consolidate the position of PSBs."
The consolidation of the PSU banks has been pending for long and has not made any headway despite various reports advocating merger of various small PSU banks.
There are 27 public sector banks, including five associates of State Bank of India.
Finance Minister Arun Jaitley in his first Budget speech on July had indicated the government's intention is mergers and acquisitions of public sector banks.
"There have been some suggestions for consolidation of public sector banks. Government, in principle, agrees to consider these suggestions," he had said.
Besides the Prime Minister and the Finance Minister, RBI Governor Raghuram Rajan and top Finance Ministry officials will be attending the retreat.
"The final objective would be to prepare a blue-print of reform action plan, once adopted which could then be implemented by the banks as well as by the Government," official sources said.
Also efforts would be made to seek "out-of-box" ideas from prominent experts and from top-level managers attending the retreat.
The other topics of discussion will include financial literacy, priority sector lending, interest subvention and human resource.