Finance Minister, Nirmala Sitharaman today announced a PSU Bank merger, which would create just 4 PSU banking entities from 10.
According to the scheme of merger the banks that are likely to amalgamate include:
1) Punjab National Bank+ Oriental Bank of Commerce+United Bank
Punjab National Bank would be the anchor bank. This would form the second largest public sector bank with business of Rs 17.95 lakh crores. The merged entity would also have the second largest branch network of 11,437 branches.
2) Canara Bank+Syndicate Bank
The second Consolidation is that of Canara Bank and Syndicate Bank making it the fourth largest public sector bank in India. It would have the third largest network in India with 10,342 branches in the country.
3) Union Bank of India+Andhra Bank + Corporation Bank
The Finance Minister also announced the merger of Union Bank of India+Andhra Bank and Corporation Bank. This would be the 5th largest PSB
The anchor bank would be Union Bank.
4) Indian Bank+Allahabad Bank
The government also announced the merger of Indian Bank with Allahabad Bank.
"It will give these banks a a high CASA and lending capacity. The technology that they use are compatible," the Finance Minister stated.
"Scaling can help reduce costs," Finance Minister Nirmala Sitharaman said.
The shares of PSU banks closed subdued in trade today despite reports of the merger.
In September last year, the government had announced the merger of 3 government banks, including Bank of Baroda, Dena Bank and Vijaya Bank.
Earlier it maybe recalled that State Bank of India had merged with the State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala, State Bank of Hyderabad.