The purpose of consolidation is not to resolve NPA issues, says principal economic advisor Sanjeev Sanyal

The government's plan to merge three public sector banks -- Bank of Baroda, Vijaya Bank and Dena Bank -- is a commercial judgement and the centre is not trying to resolve the non-performing asset (NPA) problems through the merger, said Sanjeev Sanyal, principal economic advisor.

"This is a commercial judgement which in the medium term will hopefully lead to more viable banks," said Sanyal.

The government on Monday proposed the merger of the three state-owned banks to create the country’s third largest lender as part of efforts to revive credit and economic growth.