Gujarat Global News Network, Ahmedabad
Union Finance Minister Nirmala Sitharaman on Friday announced merger of 10 public sector banks into four banks. Punjab National Bank, Oriental Bank of Commerce and United Bank will be merged to create the country’s second largest public sector bank. Union Bank of India will be merged with Andhra Bank and Corporation Bank. Canara Bank will be merged with Syndicate Bank to form the fourth largest bank in the sector, she said.
No retrenchment has taken place post merger of Bank of Baroda, Dena Bank and Vijaya Bank; staff has been redeployed and best practices in each bank have been replicated in others.
Consolidated Indian and Allahabad Banks to be 7th largest PSB with Rs 8.08 lakh crore business. Strong scale benefits to both with business doubling. High CASA & lending capacity combined in consolidated bank.
BoB + Vijaya Bank + Dena Bank merger have yielded wide ranging benefits for the banking and economic sector. It has seen robust CASA growth by 6.96 percent post the merger. Amalgamation of banks helped in strong retail loan growth.
Specialised agencies have been set up who are monitoring every loan which is over Rs 250 crores.
With these mergers, Sitharaman says that banks will be able to unlock their potential. These will now be big banks with enhanced capacity to increase credit. These banks will have a strong national presence and global reach. Operational efficiency will also ensure cost reduction in lending.
She also said in the press conference that the merged entities will have an enhanced risk appetite, thrust on next-gen technology for banking, wider offerings with enhanced customisation, and better ability to raise resources from the market.
The FM added that the mergers will not have any effect on customers.
Post the announcement, there will be 12 public sector banks in India as against 27 in 2017, when the last mergers were announced.
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