10 public sector banks to be merged into four – Live Updates

Finance-Minister-Nirmala-Sitharaman

Finance Minister Nirmala Sitharaman today announced a big consolidation of public sector banks: Indian Bank to be merged with Allahabad Bank; PNB, OBC and United Bank to be merged (PNB will be the anchor bank); Union Bank of India, Andhra Bank and Corporate Bank to be merged; Canara Bank and Syndicate Bank to be merged. In place of fragmented lending capacity with 27 public sector banks in 2017, now there will be 12 public sector banks post the latest round of consolidation of PSU banks. The consolidation of public sector banks will give them scale, the finance minister said.

Last year, the government had approved the merger of Vijaya Bank and Dena Bank with Bank of Baroda (BoB) that has become effective from April 1, 2019. In 2017, the State Bank of India absorbed five of its associates and the Bharatiya Mahila Bank.

Finance Minister is addressing the media. Here are the highlights of what she said:

We want banks with strong national presence and enhanced risk appetite

Indian Bank to be merged with Allahabad Bank

Consolidated Indian Bank and Allahabad Bank to be 7th largest public sector banks with ?8.08 lakh crore business

PNB, OBC and United Bank to be merged (PNB will be the anchor bank)

Union Bank of India, Andhra Bank and Corporate Bank to be merged

Consolidated Union Bank of India, Andhra Bank and Corporation Bank to be 5th largest public sector banks with ?14.6 lakh crore business

Canara Bank and Syndicate Bank to be merged

Consolidated Canara Bank and Syndicate Bank to be 4th largest public sector bank with ?15.2 lakh crore business

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

8 PSU banks have so far launched repo rate-linked loans

Loan tracking mechanism in PSU banks is being improved for the benefit of customers

4 NBFCs have found liquidity support through PSU banks since last Friday

For NBFCs, partial credit guarantee mechanism has already been implemented

Govt working on banking reforms

Gross NPAs of PSU banks have come down

Provision coverage ratio highest in 7 years

Best practices of each bank in consolidation of Vijaya Bank, Bank of Borada and Dena Bank have been absorbed

News Source: livemint

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