Last Updated:
The government is not considering merger of public sector banks, Minister of State for Finance Pankaj Chaudhary said on Tuesday.
To a question on whether the merger of public sector banks is being considered, Chaudhary replied: No sir”. (Representative image)
The government is not considering a merger of public sector banks, Minister of State for Finance Pankaj Chaudhary said on Tuesday.
Government’s Efforts to Strengthen PSBs
In a written reply to a question in the Rajya Sabha, he said several steps have been taken by the government to strengthen the financial condition of public sector banks (PSBs).
Systemic Reforms in the Banking Sector
Chaudhary said the reforms undertaken by the government in the banking sector have created systemic improvements and instituted checks and controls to minimise the risk of recurrence of excessive stress.
No Plans for Further Bank Mergers
To a question on whether the merger of public sector banks is being considered, Chaudhary replied: “No sir”.
Improvements Post-Merger
Chaudhary further said PSU banks have shown improvement in their capital adequacy ratio and gross non-performing assets position post-merger.
“The merger has helped in improved synergies, economies of scale, better technology integration and the same has resulted in uniform improvement across all key financial parameters,” Chaudhary added.
The 2019 Bank Consolidation Exercise
In the biggest consolidation exercise in the banking space, the government in August 2019, had announced four major mergers of public sector banks, bringing down their total number to 12 from 27 in 2017, a move aimed at making state-owned lenders global-sized banks.
Details of Bank Mergers
United Bank of India and Oriental Bank of Commerce were merged with Punjab National Bank; Syndicate Bank with Canara Bank; Allahabad Bank with Indian Bank; and Andhra Bank and Corporation Bank with Union Bank of India, effective April 1, 2020.
Previous Merger Initiatives
In 2019, Dena Bank and Vijaya Bank were merged with the Bank of Baroda. Before this, the government had merged five associate banks of SBI and Bharatiya Mahila Bank with the State Bank of India.
(With PTI inputs)
