Finance Minister Nirmala Sitharaman on August 30 unveiled a mega merger plan for public sector banks (PSBs), amalgamating 10 banks into 4. The FM said that merger would give a high CASA (Current Account & Savings Account) and lending capacity combined in the consolidated bank.
This mega consolidation drive will leave only 12 major public sector banks in the country from the earlier count of 27. The finance minister also said banks will be provided adequate capital.
In order to improve governance and better management of the banking system, the PSU banks’ boards will be given flexibility to introduce Chief General Manager.
Merger of PSBs:
- Oriental Bank and United Bank will be merged with Punjab National Bank thus becoming the second-largest bank after the merger.
- The Indian Bank will be merged with Allahabad Bank.
- Andhra Bank and Corporation Bank will be merged into Union Bank of India.
- Canara Bank to be merged with Syndicate Bank to create 4th largest public sector bank.
Financial Services Secretary Rajiv Kumar was also present at the press conference, said there was no retrenchment in the past consolidations. He added, “Employees will only benefit with the mergers”.