FM may announce another PSU bank merger soon

FM may announce another PSU bank merger soon

Finance Minister Nirmala Sitharaman, who is addressing a press conference at 4 pm today, is likely to announce one or two mergers, sources said after senior finance ministry officials met chief executives of at least 10 public sector banks on Friday.

India's second-largest public sector lender Punjab National Bank may be merged with Andhra Bank and Oriental Bank of Commerce and an announcement to this effect may come any time soon.

Finance Minister Nirmala Sitharaman, who is addressing a press conference at 4 pm today, is likely to announce one or two mergers, sources said after senior finance ministry officials met chief executives of at least 10 public sector banks on Friday.

Those who met with the secretary and other officials of Department of Financial Services included executives of Punjab National Bank, Canara Bank, Allahabad Bank, Oriental Bank of Commerce, United Bank, Allahabad Bank, Corporation Bank, Syndicate Bank and Andhra Bank.

The likely merger comes a week after Sitharaman announced Rs 70,000 crore to recapitalise public sector banks in the financial year 2019-20.

This will be the third set of merger of PSU banks in Prime Minister Narendra Modi's regime. Two mergers were announced in his first term were -- Bank of Baroda, Dena Bank and Vijaya Bank. Immediately after the merger, it reported a profit of Rs 710 crore in April-June 2019.

Prior to that, State Bank of India was merged with five of its associate banks --State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala, State Bank of Hyderabad and the Bharatiya Mahila Bank effective.

The government has been nudging the PSU banks to go for merger so that there could be fewer state-owned banks that are robust and whose balance sheet can be compared with the best in the world.

After the merger with five of its associates, the SBI entered the list of world's top 50 banks with a balance sheet size of Rs 41 lakh crore.