BANK CONSOLIDATION

Aug. 31, 2019

Government of India has announced the merger of 10 public sector banks (PSBs) into 4 banks.

About:

  • Under the scheme of amalgamation,
    • Indian Bank will be merged with Allahabad Bank (anchor bank - Indian Bank);

    • PNB, OBC and United Bank to be merged (PNB will be the anchor bank);

    • Union Bank of India, Andhra Bank and Corporation Bank to be merged (anchor bank - Union Bank of India); and

    • Canara Bank and Syndicate Bank to be merged (anchor bank - Canara Bank).



  • In place of 27 public sector banks in 2017, now there will be 12 public sector banks after the latest round of consolidation of PSU banks.

  • The merger announcement was followed by an equity infusion move of Rs 55,250 crore in these banks to enable them to grow their loan book.

  • This is a step by government towards building Next-Generation Banks. The consolidation of public sector banks will give them scale.