By Talat Mohsin
The centre on Friday announced a mega merger of ten public sector banks into four larger entities. This is the first such merger after Narendra Modi became India’s Prime Minister, and third all over. His government is dedicated to reducing the number of state run banks.
HIGHLIGHTS OF THE MERGER
• Punjab National Bank, Oriental Bank of Commerce and United Bank of India will be merged to form the second largest bank of India, after the State Bank Of India. This merger will result in the creation of a business of ₹ 17.95 lakh crore. The three banks in total would have 11,437 branches.
• The merger of Canara Bank with Syndicate Bank would make them the fourth largest bank of India, with a business of ₹15.20 lakh crore.
• Union Bank of India would be merged with Andhra Bank and corporation bank. It would be the fifth largest public sector bank with ₹14.59 lakh crore worth of business.
• Indian Bank and Allahabad Bank would also be merged.
State Bank of India, Punjab National Bank, Bank of Baroda, Bank of India, Central Bank of India, Canara Bank, Union Bank Of India, Indian Overseas Bank, Punjab and Sind Bank , Indian Bank, UCO Bank and Bank of Maharashtra would remain standing as the 12 PSUs after the merger.
According to Finance Minister Niramala Sitharaman, these decisions were taken with the objective of making them “global sized banks”. She also announced a rough break up of capital infusion intended for individual banks out of the ₹70,000 crore announced in the 2019 budget. With this merger, India will have at least six banks that can compete with large rival banks both domestically and internationally.