FM Sitharaman announces merger of 10 PSBs to 4 entities

FM Sitharaman announces merger of 10 PSBs to 4 entities

Finance Minister says it will not lead to job losses

Finance Minister Nirmala Sitharaman. (PTI File Photo)
Punjab National Bank will be merged with United Bank and Oriental Bank of Commerce
Canara Bank and Syndicate Bank will be merged into a single unit
Andhra Bank, Corporation Bank and Union Bank of India will be merged
FM also announced the merger of Indian Bank and Allahabad Bank

In a mega consolidation plan for public sector banks, the government Friday announced the merger of 10 banks with an aim to make them globally competitive. The exercise has reduced the number of state-owned banks to 12 from the existing 21.

In the first set of the merger, the second-largest PSB Punjab National Bank has merged in itself Oriental Bank of Commerce (OBC) and United Bank. The merged entity will be the second-largest public sector bank in India with Rs 19.94 lakh crore of business.

Canara Bank will merge with Syndicate Bank and will be fourth-largest public sector bank in India with Rs15.2 Lakh crore of business and 3rd largest branch network.

Similarly, the Union Bank of India, Andhra Bank and Corporation Bank will be merged to become the fifth-largest public sector lender with Rs 14.59 crore of business.

And, Indian Bank and Allahabad Bank will be consolidated to create Rs 8.08 lakh crore of business. The merged entity is expected to be the seventh-largest PSB in the country.

Bank of India and Central Bank of India continue to remain independent, national banks.

Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab and Sind Bank to continue as standalone regional PSBs.

Giving the information at a press conference here, Finance Minister Nirmala Sitharaman said that consolidation will not only ensure strong national and global presence of India's state-owned banks but also reduce cost of lending and enhance their risk appetite.

She assured there will be no job losses due to the mergers.