IN A BID to make state-owned banks into global-sized lenders, the Indian government announced four major mergers on Friday (30).
With the latest four major mergers, the total number of public sector lenders in the country will go down to 12 from 27 in 2017.
Making the announcements, country’s finance minister Nirmala Sitharaman said, United Bank of India and Oriental Bank of Commerce will be merged with Punjab National Bank (PNB), making it the second-largest public sector bank (PSB) in the country after the State Bank of India (SBI).
To replace the existing divided lending capacity of the 27 PSBs, there will only be 12 state-run banks post-consolidation, the minister added.
The finance minister assured that the lenders will be supplied with adequate capital.
The consolidated PNB will have a business size of Rs 17.94 trillion, becoming the second largest PSB after SBI with a business of Rs 52.05 trillion.
The Southern India-founded Syndicate Bank will be merged with Canara Bank, whereas Allahabad Bank will be amalgamated with Indian Bank.
Andhra Bank and Corporation Bank will be consolidated with Union Bank of India.
The merged Canara Bank will be the fourth largest lender with a business size of Rs 15.2 trillion, followed by Union Bank of India at Rs 14.59 trillion.
After the merger with Allahabad Bank, Indian Bank will be the seventh largest state-lender with a business size of Rs 8.08 trillion.
Country’s financial services secretary Rajiv Kumar, commenting on the latest move, said: “Employees will only benefit with the mergers.”
“There was no retrenchment in the past consolidations, including of SBI, and the service conditions of the employees improved,” he added.
Dena Bank and Vijaya Bank were merged with Bank of Baroda earlier this year. Bank of Baroda has a business of Rs 16.13 trillion.
India had also amalgamated five associate banks of SBI and Bharatiya Mahila Bank with India’s largest public-sector lender.