punel stating some consolidation in the banking system was inevitable finance minister p chidambaram on saturday said india must have two or three world size banks finding new business models will inevitably lead to some consolidation we should not fear consolidation i know there is pride and identity but ultimately some consolidation would have to take place in the banking system in this country he said at the bancon2012 meet here we must create at least 2 or 3 world size banks china has done it and if india wants to be and as it will be the third largest economy in the worldwe must also have one or two world size banks and some consolidation is inevitable he said chidambaram further said that while consolidation takes place among top banks there would also be place for local area banks in fact i regret that the idea of the local area bank which was started in 1996 stopped after first three licences were given i think there is place for a local area bank for serving people of the region local area drawing strength from those people and serving those people he added countrys largest lender state bank of india sbi has acquired board approval for the merger of the its remaining five associates with itself it has already amalgamated two of its subsidiaries sbi merged one of its associate state bank of saurashtra with itself in 2008 besides merging itself with state bank of indore in 2010