During a press conference on Friday, Finance Minister Nirmala Sitharaman announced the merger of two banks - Canara Bank and Syndicate Bank - both of which operate predominantly in the South. These two banks will be consolidated to form the fourth largest public-sector bank with business of Rs 15.2 lakh crore. Canara Bank has Rs 10.4 lakh crore and Syndicate Bank has Rs 4.7 lakh crore in business.
These banks together will have the third largest branch network in India with 10,342 branches across the country.
The minister said that some of the benefits of merging these two banks will include cost reduction due to network overlaps, similar culture to enable smooth consolidation, and cost saving and more income opportunities for JVs and subsidiaries.
Canara Bank currently has 58,350 employees and Syndicate Bank has 31,535 employees. The total strength of the two banks together will be 89,885 employees.
The Finance Minister also announced the mergers of Punjab National Bank, Oriental Bank and United Bank as well as Union Bank, Andhra Bank and Corporation Bank and eventually Indian Bank and Allahabad Bank.
Addressing her second press conference to announce steps to boost the economy, the finance minister said the reforms initiated in the public sector banks (PSBs) have started showing results as 14 of them posted a profit in the first quarter of the current fiscal.
The minister also said that to avoid Nirav Modi like frauds in the PSBs, the SWIFT messaging system has now been linked with the core banking system.