Finance Minister Nirmala Sitharaman announced a big news for the banks today. She an-nounced that 10 public sector banks will soon get merged into four. In this scheme of merger, Indian Bank will be merged with Allahabad Bank (anchor bank – Indian Bank); Andhra Bank and Corporation Bank to be merged (anchor bank – Union Bank of India); PNB, OBC and United Bank to be merged (PNB will be the anchor bank); Union Bank of India, and Canara Bank and Syndicate Bank to be merged (anchor bank – Canara Bank).
After this amalgamation the total number of count of the banks is going to get down to 12 public sector banks in India. Though the count was 27 in 2017. As per the finance minister, this consolidation of public sector bank will give them scale.
Along with the news, government announced the capital infusion totalling over₹55,000 crore into public sector banks: Indian Bank ( ₹2500 crore), PNB ( ₹16,000 crore), Union Bank of India ( ₹11,700 crore), UCO Bank ( ₹2100 crore), Bank of Baroda ( ₹7000 crore), Indian Overseas Bank ( ₹3800 crore), Central Bank ( ₹3300 crore), United Bank ( ₹1,600 crore) and Punjab and Sind Bank ( ₹750 crore).
She said “To make management accountable to board, board committee of nationalised banks to appraise performance of general manager and above including managing director,”
The merger of the Allahabad bank and Indian bank will make it the 7th larget public sector bank of India. The Allahabad Bank is popular in the east part of India, while Indian bank has more customers towards the southern India. This would therefore make a great combination.