In what may be termed as a major boost to banking sector, finance minister Nirmala Sitharaman today announced a merger of major public sector banks.
The mergers come after the Narendra Modi government expressed its desire for India to achieve the $5 trillion economy target. From being 27 Public Sector Banks in 2017, they have been cut down to 12 now.
This comes a week after the government announced a slew of measures to revitalize the Indian economy. The mergers announced are the biggest since the integration of State Bank of India (SBI) with five associate banks.
Among the many mergers announced is one of Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and United Bank of India having a market of Rs 17.95 lakh crore and a network of 11,437 branches, making it the second-largest PSB in the country.
Also merged are Canara Bank and Syndicate Bank to form the third-largest PSB having a business of Rs 15.20 lakh crore.
They are followed by the merging of Union Bank, Andhra Bank, and Corporation Bank — making it the fourth largest PSB.
Further in line are Indian Bank and Allahabad Bank, which also have been merged. Together they have a business of Rs 8.08 lakh crore.
Meanwhile, the Bank of India and Central Bank of India will remain central banks with a pan India presence.
The Indian economy is facing a slow down for which the government is injecting fresh capital in the banking system.