All About Mega Merger of PSU Banks – Important Information

Dear Aspirants, Continuing with NDA’s public sector units (PSU banks) merger agenda, Finance Minister Nirmala Sitharaman on Friday (August 30) met the chiefs of public sector lenders and announced the merger of PNB, OBC, United Bank of India

All About Mega Merger of PSU Banks

The three banks together will merge to form India’s second largest bank after the State Bank of India, with Rs 17.95 lakh crore business and 11,437 branches.

FM also announced the merger of

  1. Canara bank with Syndicate Bank.
  2. Union Bank will be merged with Andhra Bank and Corporation Bank.
  3. Allahabad Bank will be merged with Indian Bank.

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. 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 BharatiyaMahila Bank.

Highlights of the Finance Minister addressing to the Media:

  • We want the banks with strong national presence and enhanced risk apetite
  • Consolidated Indian Bank and Allahabad bank will be the 7thlargest PSU banks.
  • Consolidated Union Bank with Andhra Bank and Corporation Bank will be the 5th largest PSU banks.
  • Canara and Syndicate bank Consolidation to be the 4th largest PSU bank
  • Loan Tracking mechanism in PSU banks is being improved for the benefit of customers.
  • 8 PSU banks have launched repo rate linked loans so far
  • Gross NPAs of PSU banks have come down
  • Provision coverage ratio highest in 7 years
  • Government working on banking reforms
  • 4 NBFCs have found liquidity support through PSU banks since last Friday.
  • For NBFCs , partial credit guarantee mechanism has already been implemented
  • Union Cabinet on Wednesday eased foreign direct investment (FDI) norms for various industries such as single-brand retail, coal mining, contract manufacturing and digital media. It allowed 100 per cent foreign direct investment (FDI) via automatic route in coal mining and ancillary activities.

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