The Cabinet has approved the consolidation of 10 public sector banks (PSBs) into four ‘mega banks’, Finance Minister Nirmala Sitharaman announced today.
The Union Cabinet, she said, has given a go-ahead for the merger proposal and the government has been in regular touch with these banks.
“The banks’ merger is on course and decisions have already been taken by the respective bank boards,” she said.
The Narendra Modi government had announced the mega merger in August last year.
As per the plan, United Bank of India and Oriental Bank of Commerce would merge with Punjab National Bank, making the proposed entity the second largest public sector bank.
Syndicate Bank will be merged with Canara Bank, and Allahabad Bank with Indian Bank. Similarly, Andhra Bank and Corporation Bank are to be clubbed with Union Bank of India.
Bank unions, who believe the merger is not a solution to the banking sector’s problems, are opposed to the move.
The idea had been first publicly mooted in December 2018 when the RBI said that India could create some global banking majors if the then-ongoing mergers of some state-owned banks achieve the desired impact of creating stronger and well-capitalised lenders of global scale.
