Finance Minister Nirmala Sitharaman on Friday announced a mega consolidation plan for public sector banks, with Union Bank of India, Andhra Bank and Corporation Bank getting merged into a single entity.
Sitharaman said that the merger of these state-owned banks would make it the fifth largest bank of the country with business of Rs 14.59 lakh crore, which is nearly two times of Union Bank of India.
Announcing the plan, Finance Minister Nirmala Sitharaman said the merger will make the banks stronger and sustainable as well as increase their lending ability.
The three banks will, however, continue to work independently post-merger, she said.
The FM also announced the merger of Punjab National Bank, Oriental Bank of Commerce and United Bank of India into one single entity to make it the second-largest PSB with Rs 18 lakh crore business and second-largest branch network in India.
The third merger will be between Indian Bank and Allahabad Bank and fourth merger will be between Canara Bank and Syndicate Bank.
With today's merger of public sector banks (PSBs), the total of number of state-owned banks in the country would come down to 12 from 27 in 2017.
During the first term in office, Narendra Modi government's announced the merger of five associate banks and Bharatiya Mahila Bank with State Bank of India in April 2017, which was the first off the block. The recent merger of Bank of Baroda (BoB), Dena Bank and Vijaya Bank, which is effective from April this year, was second development in this regard.
Edited by Chitranjan Kumar