The
Cabinet has approved the consolidation of 10 public sector banks (PSBs) into
four 'mega banks', Finance Minister Nirmala Sitharaman announced today. The Union Cabinet, she said, has given a
go-ahead for the merger proposal and the government has been in regular touch
with these banks.
"The banks' merger is on course and
decisions have already been taken by the respective bank boards," she
said. The Narendra Modi government had announced the
mega merger in August last year.
As per the plan, United Bank of India and
Oriental Bank of Commerce would merge with Punjab National Bank , making the
proposed entity the second largest public sector bank.
Syndicate Bank will be merged with Canara Bank ,
and Allahabad Bank with Indian Bank . Similarly, Andhra Bank and Corporation Bank are to be clubbed with Union Bank of India.
Bank
unions, who believe the merger is not a solution to the banking sector's
problems, are opposed to the move.
The idea had been first publicly mooted in
December 2018 when the RBI said that India could create some global banking
majors if the then-ongoing mergers of some state-owned banks achieve the
desired impact of creating stronger and well-capitalised lenders of global
scale.
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