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Nirmala Sitharaman press conference: Bank mergers aimed at economic growth, says Finance Minister

Based on the Finance Minister's statements earlier this week, speculations are that two major announcements could be made in order to give the industry a leg-up

twitter-logo BusinessToday.In   New Delhi     Last Updated: August 30, 2019  | 17:37 IST
Nirmala Sitharaman press conference: Bank mergers aimed at economic growth, says Finance Minister
Merging PSBs is meant to create strong banks with a global presence.

Finance Minister Nirmala Sitharaman is addressing her second press briefing on economic slowdown. Based on the Finance Minister's statements earlier this week, speculations are that two major announcements could be made in order to give the industry a leg-up.

Reports also suggest that a mega consolidation plan for public sector banks could also be announced today. The Ministry of Finance has met chief executives of ten state-run banks, which are seen as top contenders for merger. The government had reportedly consulted the Reserve Bank of India in this regard earlier this year.

On August 23, FM Sitharaman had announced a slew of measures to nurse the ailing Indian economy to health. The steps included an upfront release of Rs 70,000 crore to public sector banks, measures to remedy the slowdown in auto sector, improve taxes compliance and help MSMEs and India Inc.

Follow BusinessToday.In for regular updates on the FM Nirmala Sitharaman press conference:

5:08 pm: We have consulted all stakeholders over a period of 6 month regarding the merger process, says Rajeev Kumar.

5:06 pm: The banks have been merged while keeping in mind that they are have the same technical platform, synergies and cultural affinity, Rajeev Kumar says.

5:01 pm: Most of the amalgamated banks possess the desired levels for bad loans, Rajeev Kumar says in response to a question on NPA levels of the merged entities. We will ensure that employees of the amalgamated banks benefit from the merger, and not the other way around, he further adds.

4:59 pm: After approval from the boards of the merged banks, we will discuss the matter with RBI in two phases, says Rajeev Kumar.

4:57 pm: "The merged banks have global reach, and they will look forward to global markets," says Financial Services Secretary Rajeev Kumar.

4:51 pm: Rs 55,250 crore upfront capital for credit growth and regulatory compliance to support economy. "This is not just for consolidation, but growth," says the FM.

4:48 pm: Bank boards given power to enhance sitting fees of non-official directors, says the FM.

4:47 pm: The bank board committee would be strengthened, says the FM.

4:44 pm: Specialised risk officer from market to be appointed, the FM added.

4:43 pm: More power given to boards with merger, says FM Sitharaman.

4:42 pm: After the mergers today, the number of public sector banks will come down to 12 from 27, says the FM

4:40 pm: Two banks - Central Bank of India and Bank of India - will continue their national presence.

4:38 pm: Indian Bank and Allahabad Bank will be merged, the FM said.

4:37 pm: The third merger will be Andhra Bank, Union Bank and Corporation Bank, announced the FM.

4:34 pm: The next two banks that are going to be merged come from South India. "Canara Bank and Syndicate Bank would be brought together to form the fourth-largest PSB with business of Rs 15.20 lakh crore," the FM announced.

4:31 pm: "Punjab National Bank, Oriental Bank and United Bank will be brought together to create the second-largest bank with business of 17.95 lakh crore. It will have the second largest branch network with 11,437 branches," said the FM.

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