German Finance Minister Olaf Scholz has rejected accusations that he was pressuring Deutsche Bank and Commerzbank to merge.

The Minister said the German government was in talks with the country's two largest lenders so it could intervene if needed. 

"The boards of both banks have decided that they want to explore a possible merger without fixed expectations," Scholz told the Frankfurter Allgemeine Zeitung (FAZ) in an interview. 

"They are in the driving seat, not the government," he added. 

He made the comments when asked by FAZ why he was insisting on a merger that many in Germany fear will cost thousands of jobs and fail to create a banking champion. 

"I can't imagine that the boards of big banks would weigh a merger that they don't want only because they are pressured to do so," Scholz added.

Unions fear the merger could lead to up to 30,000 job cuts.