Mega bank consolidation on track; to take effect from April 1 : Sitharaman
Consolidation plan of Mega Bank is in progress and will be effective from April 1 despite attack of coronavirus pandemic throwing the country out of track, says the Government on Thursday.
Combination of 10 public sector banks into four global size lenders is approved by the Union Cabinet sector in the starting of this financial year. People enquired if the government is taking into consideration to extend the deadline of merging public sector banks, NirmalaSithara, the Finance Minister said “at the moment there is nothing on that”.
“The merger process is very much on track and expresses hope that the banking sector would be able to meet the challenges thrown by the pandemic” says Debasish Panda, Banking Secretary.
There was a request sent by All India Bank Officers Confederation to NarendraModi, Prime Minister to extend the exercise of merging banks due to coronavirus.
According to the merger exercise, Syndicate Bank will merge into Canara Bank, Corporation Bank and Andhra Bank into Union Bank of India, Oriental Bank of Commerce and United Bank of India into Punjab National Bank and Allahabad Bank into Indian Bank.
“The merger will result in creation of seven large PSBs with scale and national reach, with each amalgamated entity having business of over 8 lakh crore and it would help banks with scale comparable to global banks and capable of competing effectively in India and across the world.” says Debasish Panda.
Adding to this, amalgamation will give impute entities by improving their capability to support bigger ticket size lending and have competitive functions by virtue of bigger financial capacity.
Previous year Dena Bank and Vijaya Bank was merged with Bank of Baroda. In addition to this, the government decides to merge five associate banks of SBI and BharatiyaMahila Bank with PSB.