In relation to banking reforms in India, who heads the cabinet level committee of the Union Government that examines and approves proposals for the merger of public sector banks?

Introduction / Context:
This question relates to the structure of decision making on public sector bank consolidation in India. In order to handle proposals for merger and amalgamation of public sector banks, the Union Government set up a cabinet level committee, often referred to as an alternative mechanism. Knowing who heads this committee helps candidates connect banking reforms with political leadership and cabinet responsibility at that time.

Given Data / Assumptions:

• The context is the merger of public sector banks in India.
• The body mentioned is a cabinet level committee formed by the Union Government.
• The question asks specifically about the head of this committee.
• Options include the Prime Minister, the then Finance Minister, the Home Minister and the central bank Governor.

Concept / Approach:
The government created a ministerial panel to consider proposals for consolidation among public sector banks. This panel was chaired by the Union Finance Minister, who at that relevant time was Arun Jaitley. As Finance Minister, he was naturally positioned to lead decisions on bank recapitalisation and merger proposals. The Reserve Bank Governor does not head cabinet committees. The Prime Minister chairs many key groups but this specific mechanism was entrusted to the Finance Minister. Therefore, Arun Jaitley is the correct answer.

Step-by-Step Solution:
Step 1: Identify the time period as the phase when the Union Government actively pursued consolidation of public sector banks. Step 2: Recall that an alternative mechanism at cabinet level was formed to examine merger proposals. Step 3: Remember that the Finance Minister is usually central to policy decisions on banks and financial sector reforms. Step 4: Among the options, note that Arun Jaitley was the Union Finance Minister during this period. Step 5: Select Arun Jaitley as the head of the committee for public sector bank mergers.

Verification / Alternative check:
Press releases and media reports of that time clearly stated that the committee to oversee merger proposals of public sector banks would be chaired by the Finance Minister. Since Arun Jaitley was holding this portfolio, his name appears as the head in those reports. The Prime Minister continues to oversee broad economic policy through the cabinet but this specific mechanism was delegated to the Finance Minister, which confirms that Arun Jaitley is the appropriate choice among the given options.

Why Other Options Are Wrong:
Narendra Modi, as the Prime Minister, leads the Union Council of Ministers but does not head every specialised cabinet level committee. Rajnath Singh was associated with portfolios such as Home Affairs and later Defence, not finance sector consolidation. Urjit Patel served as Governor of the Reserve Bank of India, a statutory post that is not part of the cabinet and therefore would not lead a cabinet committee. These roles do not align with the specific responsibility of chairing the ministerial panel on bank mergers.

Common Pitfalls:
A typical error is to assume that the Prime Minister automatically heads all important committees, which is not accurate because cabinet work is often delegated to specialised groups. Another mistake is to confuse the role of the central bank Governor with that of elected ministers, and assume that the Reserve Bank would lead merger decisions directly. Aspirants should remember that while regulatory input is crucial, formal decisions on restructuring public sector banks are made through political executive channels led by the Finance Minister.

Final Answer:
The cabinet level committee that examined merger proposals of public sector banks was headed by Arun Jaitley, the then Union Finance Minister of India.