Mega Bank Merger – Stronger when United.

Mega Bank Merger – Stronger when United.

19TH July 1969, was the date when the government of India nationalized 14 major private banks in India and now it’s 30TH August 2019 when Finance Minister Nirmala Sitharaman announced the merger of 10 public sector banks into four. The main motive behind this merger is to create stronger global sized lenders in order to boost economic growth from a six-year low.

Four new sets of the merger are:

  1. Punjab National Bank(PNB), Oriental Bank of Commerce, United Bank of India
  2. Canara Bank, Syndicate Bank
  3. Union Bank, Andhra Bank, Corporation Bank
  4. Indian Bank, Allahabad Bank

Last time three public sector banks were merged into one. They were Vijaya Bank, Dena Bank with Bank of Baroda. On 15th February 2017 after the Union Cabinet’s approval S.B.I had also merged with its five associates. There are six banks that are not included in the merger and will remain independent. UCO bank, Sind Bank, Indian Overseas Bank, Bank of Maharashtra, that basically have a strong regional focus, will continue as separate entities. Bank of India and Central Bank of India are also excluded from this merger.

Megabank merger this time is followed by capital infusion of more than Rs 55000 cr with PNB getting Lion’s share out of it. The amount distributed to each bank are as follows:

BANKSAMOUNT( in crore)
1.PNBRs 16000
2.UNION BANKRs 11700
3.BANK OF BARODARs 7000
4.INDIAN BANKRs 2500
5.INDIAN OVERSEAS BANKRs 3800
6.CENTRAL BANKRs 3300
7.UCO BANKRs 2100
8.UNITED BANK OF INDIARs 1600
9.PUNJAB AND SINDH BANKRs 750

On one hand, out of the major challenges faced by the banks post-merger, one is the management of its’ huge human resource. But on the other hand, banks will have a larger capital base after the merger to offer a loan amount to its’ customers. After this mega-merger drive, there is all total of 12 public sector banks in India from 27. Top 12 banks 0f India post-merger are:

BANKSBUSINESS AMOUNT
1.S.B.IRs 52.05 Lakh cr
2.BANK OF BARODARs 17.95 Lakh cr
3.PNBRs 17.95 Lakh cr
4.CANARA BANKRs 15.20 Lakh cr
5.UNION BANKRs 14.59 Lakh cr
6.BANK OF INDIARs 9.03 Lakh cr
7.INDIAN BANKRs 8.08 Lakh cr
8.CENTRAL BANKRs 3.75 Lakh cr
9.INDIAN OVERSEAS BANKRs 3.75 Lakh cr
10.UCO BANKRs 3.17 Lakh cr
11.BANK OF MAHARASHTRARs 2.34 Lakh cr
12.PUNJAB AND SIND BANKRs 1.71 Lakh cr

Credits :

Content: Prachi Singh

Graphics: Pradatta Nigamanshu 

Also, read

Leave a Reply

Close Menu