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‘Clearing path for $5 trillion economy’: Nirmala Sitharaman announces 4 mega public sector bank mergers

With today’s announcement, post consolidation, India will have 12 Public Sector Banks from 27 Public Sector Banks.

SNS | New Delhi |

In a major announcement, Union Finance Minister Nirmala Sitharaman declared the merger of Punjab National Bank, Oriental Bank of Commerce and United Bank to form the second-largest public sector bank with business of Rs 17.95 lakh crore, which is 1.5 times the size of Punjab National Bank.

The Finance Minister also announced three other PSU bank amalgamation plans.

Canara Bank will be merged with Syndicate Bank to become the fourth-largest public sector bank with business of Rs 15.20 lakh crores.

Sitharaman also announced the merger of Union Bank of India with Andhra Bank and Corporation Bank to make it the fifth-largest public sector bank and the merger of Indian Bank with Allahabad Bank to be the seventh-largest public sector bank with business of Rs 8.08 lakh crores.

After today’s announcement on merger of banks, post-consolidation, India will now have 12 Public Sector Banks from 27 Public Sector Banks.

Bank of India and Central Bank will remain independent.

Announcing a slew of measures to empower the public sector banks, Nirmala Sitharaman said a board committee of nationalised banks will appraise the performance of general managers and higher positions.

Specialised ‘Chief Risk Officers’ will be appointed at PSBs at market-linked compensation to attract best available talent.

PSB boards will be given the mandate to rationalise board committees.

The Finance Minister further informed that specialised agencies have been set up to monitor every loan which is over Rs 250 crores.

Loan recoveries have hit a recover level of Rs. 1,21,076 crore, she said, adding that gross non-performing assets or bad loans have come down from 8.65 lakh crores to 7.90 lakh crores, she said.

The government “wants a strong financial system” and the banking reforms will clear the path to make India a $5-trillion economy, the Finance Minister said while announcing the major moves.