Finance Minister Nirmala Sitharaman today announced a big consolidation of public sector banks, 10 public sector banks to be merged into four. PNB, Indian Bank, Canara Bank and Union Bank of India will be the four anchor banks.
Under the scheme of amalgamation, Indian Bank will be merged with Allahabad Bank (anchor bank – Indian Bank); PNB, OBC and United Bank to be merged (PNB will be the anchor bank).
Union Bank of India, Andhra Bank and Corporation Bank to be merged (anchor bank – Union Bank of India); and Canara Bank and Syndicate Bank to be merged (anchor bank – Canara Bank).
In place of 27 public sector banks in 2017, now there will be 12 public sector banks after the latest round of consolidation of PSU banks.
The consolidation of public sector banks will give them scale, the finance minister said.
The government also announced capital infusion totalling over ₹55,000 crore into public sector banks: PNB ( ₹16,000 crore), Union Bank of India ( ₹11,700 crore).
Bank of Baroda ( ₹7000 crore), Indian Bank ( ₹2500 crore), Indian Overseas Bank ( ₹3800 crore), Central Bank ( ₹3300 crore), UCO Bank ( ₹2100 crore), United Bank ( ₹1,600 crore) and Punjab and Sind Bank ( ₹750 crore).
Last year, the government had approved the merger of Vijaya Bank and Dena Bank with Bank of Baroda (BoB) that become effective from April 1, 2019.
In 2017, the State Bank of India absorbed five of its associates and the Bharatiya Mahila Bank.