Consolidation in Indian Banking Sector- Issues and challenges.

The Indian banking system is characterized by a large number of banks with mixed ownership. The trend towards consolidation has been driven by the need to attain meaningful balance sheet size and market share in the face of intensified competition, whereas the trend towards convergence is driven across the industry to provide most of the financial services such as banking, insurance, investment, cash management, etc., to the customers under one roof. The financial performance of the banks suggests that the banks are becoming more focused on their activities and primary factors for their consolidation is to scale up their operations and technological progress, excess retention capacity, need for large investment. The present paper attempts to find out the reasons to get consolidated in Indian Banking sector. This paper also analyzes some critical issues and challenges in consolidation in indian banking sector. [ABSTRACT FROM AUTHOR]