New Delhi, Aug. 27 -- India should consider consolidating banks to create a few large institutions of broadly similar size while preserving competition in the sector, the Economic Advisory Council to the Prime Minister (EAC-PM) said in a working paper.

The paper, titled 'Reforms, Efficiency, and Productivity of Indian Banking Sector in the Last Decade: A DEA Approach', said such consolidation could help banks meet the economy's growing credit requirements as India works towards the Viksit Bharat 2047 goal.

Consolidation Has Increased Scale

The EAC-PM noted that although concentration in India's banking sector remains relatively low, individual banks have widely different market shares, ranging from about 20 per cent to below 1 per cent...