Amalgamation of 10 public banks into 4 to begin on April 1

Union cabinet approves merger of 10 public banks into 4, starting on the new financial year, April 1st onwards.

Finance Minister Nirmala Sitharaman
Finance Minister Nirmala Sitharaman

The Union Cabinet on Wednesday approved the merger of 10 public sector banks (PSBs) into four entities, a move that was first proposed in August, 2019. This move aims at having fewer but stronger lenders in India.

“Banks have submitted the scheme of amalgamation, which the Cabinet has approved today,” finance minister Nirmala Sitharaman told reporters, adding that every bank service will remain intact after the merger.

The date of implementation of the merger is 1 April, after which there will be only 12 public sector lenders.

The Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and United Bank will be brought together to form the second largest public sector bank in the country, after State Bank of India (SBI). The other merger will be between Canara Bank and Syndicate Bank, which will make it the fourth-largest public sector lender, while Union Bank of India will be merged with Andhra Bank and Corporation Bank to build India’s fifth-largest lender. In addition, Indian Bank will be merged with Allahabad Bank to make India’s seventh-largest PSB.

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