Top 10 Public Sector Banks To Merge Into 4 Stronger Banking Entitites

From April 1, 2020, ten government-run banks have been merged into four entities. The branches of the banks getting merged shall now be a part of the parent bank. Customers of such banks shall likewise be customers of the parent bank.

This news of the bank mergers was announced in August, 2019. It got its approval by the Union Cabinet on the 4th of March.

This is not the first of India’s bank mergers. There have been several in the past, such as in 2017, State Bank of India took 5 associate banks, as well as the Bharatiya Mahila Bank. In 2019, Dena bank and Vijaya Bank were taken under Bank of Baroda. There was a merger of ING Vyasa and Kotak Mahindra Bank, along with an amalgamation of the Centurion Bank of Punjab Ltd. With the HDFC Bank, which took place in 2014 and 2008 respectively.

Here are a few facets of the merger:

1. As per the news yesterday, OBC or Oriental Bank of Commerce and the UBI or the United Bank of India shall get merged with Punjab National Bank. This merged economic entity shall now become the second largest public sector bank. It shall have a starting business worth Rs. 17.95 lakh crores and has 11, 437 branches.

2. The Syndicate Bank is merged with Canara Bank. This shall be the fourth largest bank in the public sector with a business worth Rs. 15.20 crore and a branch network of 10,324 branches.

3. All branches of Allahabad Bank shall now function as branches of Indian Bank. This merger gives rise to the seventh-largest bank in the public sector with a total business of Rs. 8 crores.

4. After the merging of Corporation Bank and Andhra Bank with the Union Bank of India, their branches shall now belong to the UBI. This shall now become the fifth-largest bank in the public sector. It shall have a business of Rs. 14.59 crores and will have 9,609 branches.

5. To take care of merger plans of these banks, the government of India has allocated Rs. 65,855 crores.

6. Rs. 16,091 crores is given in PNB, Rs. 11,768 crores is given to UBI, Rs. 6,571 crores is given to Canara Bank while Rs. 2534 crores is given to Indian Bank. Allahabad Bank received 2,153 crores, the Union Bank of India received Rs. 1,666 crores, the Andhra Bank got Rs. 200 crores, the Indian Overseas Bank got Rs. 4,360 crores while the UCO Bank for Rs. 2,142 crores.

7. The government says these mergers shall lead to the development of stronger banking institutions. 

8. It shall lead to the consolidation of PSBs from 27 to 12.

9. The 12 new public sector banks shall be 6 merged ones and 6 independent ones. Merged ones include SBI, PNB, BoB, Canara Bank, UBI and Indian Bank. Independent ones include Indian Overseas Bank, Bank of Maharashtra, UCO Bank, Punjab and Sindh Bank.