Punjab National Bank (PNB) on Saturday said a board meeting will be held soon to consider amalgamation of Oriental Bank of Commerce and United Bank of India with itself.
The bank has received a communication from the Ministry of Finance that the Alternative Mechanism (AM), after consultation with Reserve Bank of India (RBI), has decided that Punjab National Bank, Oriental Bank of Commerce (OBC) and United Bank of India may consider amalgamation, it said in a regulatory filing.
“Accordingly, a meeting of the board of directors will consider the amalgamation will be convened by the bank shortly,” PNB said.
Meanwhile, Corporation Bank, which is going to be merged with Union Bank of India along with Andhra Bank, too said a board meeting will be held to consider the merger.
In a stock exchange filing, it said “a meeting of the Board of Directors of the Bank to consider the amalgamation will be convened by the Bank in due course”.
The government on Friday unveiled a mega plan to merge 10 public sector banks into four as part of plans to create fewer and stronger global-sized lenders as it looks to boost economic growth from an over six-year low.
Finance Minister Nirmala Sitharaman, who had last week announced tax sops and measures for sectors such as auto, announced four new sets of mergers – Punjab National Bank, Oriental Bank of Commerce and United Bank of India will combine to form the nation’s second-largest lender; Canara Bank and Syndicate Bank will merge, Union Bank of India will amalgamate with Andhra Bank and Corporation Bank, and Indian Bank will merge with Allahabad Bank.
The exercise, seen together with the previous two rounds of bank consolidation, will bring down the number of nationalised public sector banks to 12 from 27 in 2017. This, the government feels, will make bank balance sheet stronger with greater capacity to lend.