Video editor: Vishal Kumar
Video producer: Anubhav Mishra
In the biggest consolidation exercise in the banking space, the central government on Friday, 30 August, announced four major mergers of public sector banks (PSBs), a move aimed at making state-owned lenders global sized banks. With this announcement, India will now have 12 PSBs.
United Bank of India and Oriental Bank of Commerce will be merged with Punjab National Bank, making the proposed entity the second largest public sector bank (PSB).
Post the consolidation, announced on Friday, the combined entity will have business size of Rs 17.94 lakh crore, becoming the second largest PSB after SBI with a business of Rs 52.05 lakh crore.
Making the announcements, Sitharaman also said that Syndicate Bank will be merged with Canara Bank, while Allahabad Bank will be amalgamated with Indian Bank.
The consolidated Canara Bank will be the fourth largest bank with business of Rs 15.2 lakh crore, followed by Union Bank of India at Rs 14.59 lakh crore.
Similarly, Andhra Bank and Corporation Bank will be consolidated with Union Bank of India.
After subsuming Allahabad Bank, Indian Bank will be the seventh largest state-lender with business size of Rs 8.08 lakh crore.
The finance minister also said banks will be provided adequate capital.
Last week, she had announced that the Rs 70,000 crore capital infusion for PSBs for the current fiscal would be front-loaded.
Financial Services Secretary Rajiv Kumar, who was also present at the press conference, said there was no retrenchment in the past consolidations, including of SBI, and service conditions of employees improved.
Earlier this year, Dena Bank and Vijaya Bank were merged with Bank of Baroda. Prior to this, the government had merged five associate banks of SBI and Bharatiya Mahila Bank with the State Bank of India.
Bank of Baroda, after the merger with Vijaya Bank and Dena Bank, had become the country's third largest bank. It has a business of Rs 16.13 lakh crore.
(With inputs from PTI)
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)