The Punjab National Bank (PNB) will become the second largest lender in India (Photo Credit: File Photo)
In what can be termed as one of the biggest consolidation exercises in India’s banking history, the merger of 10 public sector undertaking (PSU) banks into four larger and stronger banks will come into effect from Wednesday (April 1). In August last year, Finance Minister Nirmala Sitharaman had announced about the merger exercise of 10 PSU Banks with 4 strong state-owned banks. After the merger, the customers, including the depositors of the pre-existing banks will be considered as the customers of the larger entities.
The merger includes an anchor bank and amalgamating banks. Following the merger, the operations of the amalgamating banks (PSUs) will be handed over to the anchor banks (the state-owned ones). The merger is likely to impact the customers of the amalgamating banks while the status quo will prevail for the anchor banks.
The Punjab National Bank (PNB) will become the second largest lender in India after it takes over Oriental Bank of Commerce and United Bank of India.
The merger of Canara Bank and Syndicate Bank will merge to become the fourth largest lender in the country. The combined business of both the banks will be of Rs 15.20 crores, reports TOI.
The Indian Bank and Allahabad Bank will come together to form the seventh largest lender in the country with a cumulative business of Rs 8.08 Lakh crores.
Moreover, in December last year, RBI had said that the country could create some global banking majors if the ongoing mergers of state-owned banks achieve desired impacts of creating stronger and well-capitalised lenders of global scale.
"The merger of PSBs is likely to transform the face of our banking sector with the emergence of stronger, well-capitalised banks aided by cutting-edge technology and state-of-the-art payment systems. Our banks have the potential to become global baking leaders," the Reserve Bank of India said in its annual report on 'trends & progress of banking 2018-19.'
(With PTI inputs)