Cabinet approves merger of 10 public sector banks into 4 entities.
• The date of implementation of the merger is 1 April
• There will be 12 public sector lenders post the merger
The Union Cabinet on Wednesday approved the merger of 10 public sector banks (PSBs) into four entities, aimed at having fewer but stronger lenders in India.
“Banks have submitted the scheme of amalgamation, which the Cabinet has approved today," finance minister Nirmala Sitharaman told reporters, adding that every bank service will remain intact after the merger.
The date of implementation of the merger is 1 April.
Currently, there are 18 PSBs compared with 27 in 2017. There will be only 12 public sector lenders post the merger.
In August, the finance ministry had announced the consolidation of 10 public sector lenders. Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and United Bank will be brought together to form the second largest public sector bank in the country, after State Bank of India (SBI).
The other merger will be between Canara Bank and Syndicate Bank, which will make it the fourth-largest public sector lender, while Union Bank of India will be merged with Andhra Bank and Corporation Bank to build India’s fifth-largest lender. In addition, Indian Bank will be merged with Allahabad Bank to make India’s seventh-largest PSB.
In April 2019, Bank of Baroda (BoB) became the country’s third largest lender after its merger with Dena Bank and Vijaya Bank. In 2017, five associate banks and Bharatiya Mahila Bank merged with State Bank of India (SBI).
Sitharaman also said the government has looked at BoB’s merger with Dena Bank and Vijaya Bank to understand if any lesson has to be learnt from that.
“The average retail loan sanctioning time has come down from 23 days to 11 days, operating profit is up by 11.4%in Bank of Baroda," she said, adding that the government had kept key financial parameters in mind before the announcement of the merger.
In the current financial year, the government had infused ₹40,000 crore in these banks, information and broadcasting minister Prakash Javadekar said. (Source: Livemint)
Quick Enquiry
Our Results
