Modi govt announce mega merger for Public sector banks

In a major reform measure, the National Democratic Alliance (NDA)-led-BJP government on Friday announced to amalgamate 10 state-run PSBs into 4 entities.

The banks invited for consultations as top contenders for merger include Union Bank of India, Punjab National Bank, Oriental Bank of Commerce, Canara Bank, United Bank, United Bank, Allahabad Bank, Corporation Bank, Syndicate Bank and Andhra Bank. 

After the amalgamation, only 12 PSBs will be left in India from the 27 earlier.

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The following are the banks that will be subsuming other PSBs.

Anchor BankAmalgamation Bank(s)Business SizePSBs rank by size
Punjab National
Orient Bank of Commerce and United Bank of India ₹ 17.95 lakh
2nd largest
Canara Bank Syndicate Bank ₹ 15.20 lakh
4th largest
Union Bank of
Andhra Bank and Corporation
₹ 14.59 lakh
5th largest
Indian Bank Allahabad Bank ₹ 8.08 lakh
7th largest

“The PSB merger will be announced anytime soon as part of the government’s reforms agenda,” according to a top source familiar with the development.

According to Finance Minister Nirmala Sitharaman, Canara Bank and Syndicate Bank will be merged into one entity, while Union Bank of India, Andhra Bank and Corporation Bank will be amalgamated into a single entity. 

Similarly, Indian Bank and Allahabad Bank will become one entity. 

The Finance Minister further said that the Bank of India and Central Bank of India would remain independent. 

Consequent to the merger, Punjab National Bank will become the second largest PSB in India (SBI remains India’s largest bank) with a total business of Rs 17.5 lakh crore.

Additionally, the total business of the merged entity of Canara Bank and Syndicate Bank will be Rs 15.20 lakh crore. It will become the fourth largest PSB in the country.

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