What’s also noteworthy is the fact that the government had infused capital worth more than Rs 55,000 crores into public sector banks (PSBs). The government move to reduce the number of Public Sector Banks from the existing 21 to 12 is for creating 3-4 global sized banks.
Also, customers including depositors of merging banks will be treated as customers of the banks in which these banks have been merged.
Merger List of PSU Banks in India 2021
|Sl. No||Acquirer Banks||Banks to be Merged|
|1.||Punjab National Bank(PNB)||Oriental Bank of Commerce and United Bank of India|
|2.||Indian Bank||Allahabad Bank|
|3.||Canara Bank||Syndicate Bank|
|4.||Union Bank of India||Andhra Bank and Corporation Bank|
1. Punjab National Bank
Punjab National Bank (PNB) will take over Oriental Bank of Commerce and United Bank of India as an anchor bank. It will become the country's second-largest bank, with business size of Rs 17.94 lakh crore, after SBI which has the business of over Rs 52 lakh crore.Punjab National Bank (PNB) has unveiled a new logo as it merges with United Bank of India and OBC with it, with effect from April 1. The new logo will bear distinct signages of all the three public sector lenders.
2. Canara Bank:
Canara Bank will take over Syndicate Bank, and it will be the fourth-largest public sector bank of the country. After the merger, the combined business will be Rs 15.20 lakh crore. With lower gross NPA ratio of 8.77%, Canara Bank will get about Rs 6,500 crore capital from the government.
3. Union Bank of India:
Union Bank of India will see itself taking over Andhra Bank and Corporation Bank. Post-merger it will become 5th largest PSB. The combined business base of the merged bank will be Rs 14.59 lakh crore. Union Bank has a high Net NPA ratio of 6.85%. The government will provide Rs 11,700 crore to Union Bank for the merger process.
4. Indian Bank:
Indian Bank will merge with Allahabad Bank, and the combined business will be Rs 8.07 lakh crore. Post-merger it will become 7th largest PSB. Indian Bank had a net NPA ratio of 3.75%. Bank will get Rs 2,500 crore worth capital from the government to complete the merger.
Post the mega-merger, the six PSBs that will remain independent are as follows:
1. Indian Overseas Bank,
2. UCO Bank,
3. Bank of Maharashtra,
4. Punjab and Sind Bank
5. Bank of India, and
6. Central Bank of India.
NOTE: Last year, the government had merged Dena Bank and Vijaya Bank with Bank of Baroda, creating the third-largest bank by loans in the country.
Impact of PSU Bank Mergers
The merger of PSU banks has its share of merits and demerits. The addition of staff and network is the effect that can be easily gauged from the impending merger move. What else can emerge due to the merger? Don’t know? Let us have a look below.
Merits of Merger-
- A large capital base would help the acquirer banks to offer a large loan amount
- Service delivery can get improved
- Recapitalization need from the government to reduce
- Customers will have a wide array of products like mutual funds and insurance to choose from, in addition to the traditional loans and deposits
- Technological up-gradation on the cards and various other products
- With fewer banks, it is possible for the ministry to better focus on the banks on its watch.
Demerits of Merger-
- It would be tough to manage issues pertaining to human resource
- Few large inter-linked banks can expose the broader economy to enhanced financial risks
- The local identity of small banks won’t be that prominent.
So, this was all from our side regarding the merger of Public sector banks. If you have any further query or feedback, do let us know in the comment section. If you liked this post do not forget to upvote it so that we come to know how you liked this article and we can put similar articles in the future.
Stay tuned with BYJU'S Exam Prep for more important updates. Keep yourself ahead of everyone to get through your desired job. Get access to a number of mock tests in a single package. Learn, revise, analyze with BYJU'S Exam Prep Test Series.
Enroll in Selection Batch SBI & IBPS PO Main Exams and kick start your preparation with the best faculty members in India with decades of experience. Check out the important features of this course.
- Complete Syllabus Coverage
- 70+ Interactive Live Classes
- 50+ Practice Quizzes
- 50+ PDFs
- 10 Mock Tests
Further, if you wish to have unlimited access to all 20+ structured live courses and 500+ mock tests, then subscribe to Online Classroom Program. This will cover all important banking and insurance exams like IBPS PO, IBPS RRB, SBI PO, RBI Grade-B, etc.
So why wait? Subscribe to Online Classroom Program now and #GetSuperReady for your exam.
The Most Comprehensive Exam Prep App.