NEWS Details

News Details


Aug - 2019

Finance Minister Nirmala Sitharaman announces the mega banks merger, 10 PSBs to get total Rs 55,250

Finance Minister Nirmala Sitharaman announces the mega banks merger, 10 PSBs to get total Rs 55,250 crore.

The Centre has made a series of announcements to boost the banking and financial sector of the country, including a merger of major state-run lenders. 

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Here are the key points regarding these mergers: 

Consolidated PNB+OBC+United Bank to be 2nd largest PSB with Rs 18 lakh crore business and 2nd largest branch network in India. Scale, nationwide & global presence and high CASA to drive growth.

Consolidated Indian & Allahabad Banks to be 7th largest PSB with Rs 8.08 lakh crore business. Strong scale benefits to both with business doubling. High CASA & lending capacity combined in a consolidated bank. 

Consolidated Union+Andhra+Corporation Banks to be 5th largest PSB with Rs 14.6L Cr. business & 4th largest branch network in India. Strong scale benefits to all 3 with biz becoming 2 to 4½ times that of an individual bank. 

"We shall continue with 2 banks which will have a national presence - Bank of India with Rs 9.3 Lakh Crores of business size and Central Bank with Rs 4.68 Lakh Crores of business size, " said Finance Minister Nirmala Sitharaman. 

She further added that "Indian Bank with (merge) Allahabad Bank, they will be the seventh-largest Public Sector Bank with a business of Rs 8.08 lakh crores."

"Union Bank of India, with Andhra Bank and Corporation Bank shall become the fifth largest public sector bank now, Sitharaman added. 

Nirmala Sitharaman further added that "Canara Bank with (merge) Syndicate Bank, they will be the fourth largest Public Sector Bank with business of Rs 15.20 lakh crores." 

She said the creation of next-generation banks was imperative for India to become a US dollar 5 trillion economy in the next five years. 

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Sitharaman further asserted that the NPAs of banks have come down due to the measures taken by the government to strengthen the financial sector. 

"The NPAs have come down from Rs 8.65 lakh crore in December 2018 to Rs 7.90 lakh crore now," she added. 

In the previous term of the Modi govt, five associate banks and Bharatiya Mahila Bank were merged with State Bank of India (SBI). Moreover, Dena Bank, Vijaya Bank were also merged with Bank of Baroda which came into effect from April 1, 2019. 

In May this year, global news agency Reuters had reported that the new government may look to merge government-run Punjab National Bank(PNB) with two other PSU banks including Oriental Bank of Commerce, Andhra Bank and Allahabad Bank.

According to the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980, the government must consult the Reserve Bank of India (RBI) before planning of merger plan. 

Union Cabinet on Wednesday eased foreign direct investment (FDI) norms for various industries such as single-brand retail, coal mining, contract manufacturing and digital media. 

It allowed 100 per cent foreign direct investment (FDI) via automatic route in coal mining and ancillary activities. 

The Cabinet also approved export subsidy for 60 lakh tonnes of sugar, providing relief to sugarcane farmers, Union Environment Minister Prakash Javadekar said at the media briefing. 

Last Friday, Sitharman had unveiled a slew of measures ranging from a rollback the additional surcharge on foreign portfolio investors (FPIs) and domestic investors which she had introduced at the Union Budget in July, to an immediate recapitalisation of public sector banks (PSBs) and a bouquet of measures to ease a taxpayers’ woes.  


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