The merger of ten government-run banks
into four will come into force from April 1. The branches of the merging banks
will operate as branches of the banks in which they have been merged. Customers
of merging banks will also now be treated as customers of the banks in which
these banks have been merged. The banks' merger was announced last year in
August and the union cabinet gave the final approval on March 4. In the past,
various other bank mergers have taken place. For instance, in 2017, the
country's largest public lender - the State
Bank of India took over five of its associates and Bharatiya
Mahila Bank. Last year, Vijaya Bank and Dena Bank were merged with Bank
of Baroda. Kotak Mahindra
Bankcand ING Vysya Bank merger and amalgamation of Centurion Bank
of Punjab Ltd. with HDFC Bank took place in 2014 and 2008, respectively.
Here are a few aspects
of the PSU bank merger:
1. As per the latest merger- Oriental
Bank of Commerce (OBC) and United
Bank of India (UBI) will be merged with Punjab National Bank (PNB).
The merged entity will become the second-largest state-run bank. The new entity
will have a business of Rs 17.95 lakh crore and 11,437 branches.
2. The amalgamation of Syndicate Bank
into Canara Bank will create the fourth-largest public sector bank with Rs
15.20 lakh crore business and a network of 10,324 branches.
3. Allahabad Bank branches will
operate as those of the Indian Bank. The merger of Allahabad Bank with the
Indian Bank will create the seventh-largest public sector bank with Rs 8.08
lakh crore business.
4. Branches of Andhra Bank and Corporation Bank will
function as the branches of Union
Bank of India. Andhra Bank and Corporation Bank's merger with Union Bank
of India will create India's fifth-largest public sector bank with Rs 14.59
lakh crore business and 9,609 branches.
5. The government had front-loaded
Rs 68,855 crore to take care of the bank-merger plan.
6. Punjab National Bank was given
Rs 16,091 crore, Union Bank of India Rs 11,768 crore, Canara Bank Rs 6,571
crore and Indian Bank Rs 2,534 crore. Allahabad Bank was provided Rs 2,153
crore, United Bank of India Rs 1,666 crore, Andhra Bank Rs 200 crore, Indian
Overseas Bank Rs 4,360 crore and UCO Bank Rs 2,142 crore.
7. According to the government, the
merger of the 10 banks will lead to the creation of stronger establishments.
This merger would follow in the example of the amalgamation of Bank of Baroda,
Vijaya Bank, and Dena Bank last year.
8. With this mega-bank mergers, the
number of PSBs will get consolidated from 27 banks in 2017 to 12 banks in 2020.
9. The new 12 public sector banks
will be -- six merged banks and six independent banks. State Bank of India,
Bank of Baroda, Punjab National Bank, Canara Bank, Union Bank of India, Indian
Bank will be the six merged banks. And Bank of India(BoI), Central Bank of India, Indian Overseas Bank, UCO Bank, Bank
of Maharashtra and Punjab and Sind Bank, which have a strong
regional focus, will remain independent entities.
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