The consolidation speculation in other government banks has risen sharply

After the announcement of the merger of Bank of Baroda, Vijaya Bank and Dena Bank, the consolidation speculation in other government banks has risen sharply. This can lead to pressure on the share price of large public sector banks, whose performance is good with small government banks.

The foreign brokerage company CLSA said, "To improve the condition of weak banks, consolidation between public sector banks is necessary. If the merger area is taken into consideration, then it will help. However, due to the speculation of merger and bailout, pressure on big and better government banks can be made. "

Suresh Ganapati, head of Financial Services Research in Macquerie said, "After the announcement of the merger of 3 banks, the discussion about PNB, Canara Bank and Union Bank has been heated. These may also be a merger of weaker banks".