PNB, Oriental Bank and United Bank to be merged: FM Nirmala Sitharaman

Marco Green
August 30, 2019

"In place of fragmented lending capacity with 27 public sector banks in 2017, now there will be 12 public sector banks post the latest round of consolidation of PSU banks".

Mumbai: Union Finance Minister Nirmala Sitharaman announced Friday that several public sector banks would be merged to energise and consolidate their values as the country aims to achieve U.S. 5 trillion dollar economy.

The liquidity support to NBFCs and housing finance companies has improved as the partial credit guarantee scheme has been executed. While PNB will retain its identity as the anchor bank, it will be "acquiring" the other two smaller banks.

This announcement comes a week after Sitharaman announced a slew of measures to give a fillip to the economy.

Addressing a press conference, she said that the government recognised that consumption required a boost. After merger, it will be second largest PSB with the business of 18 lakh crore rupees and second-largest branch network in the country.

"Consolidated Indian & Allahabad Banks to be 7th largest #PSB with?"

Consolidated Union, Andhra and Corporation Banks will have a total business of Rs 14.6 lakh crore while consolidated Indian and Allahabad Banks will have a total business of Rs 8.08 lakh crore.

Sitharaman said that Oriental Bank of Commerce and United Bank would be merged with New Delhi-based Punjab National Bank, creating India's second largest lender after State Bank of India.

Earlier it maybe recalled that State Bank of India had merged with the State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala, State Bank of Hyderabad. Similarly, PNB, OBC, Utd Bank, Union Bank and Corporation Bank are on Finacle banking platform.

Citing the recent merger of Bank of Baroda, Vijaya Bank and Dena Bank, she says no one was retrenched. Ms Sitharaman said, no interference in the bank's commercial decisions.

Meanwhile, gross NPAs of PSBs reduced from Rs 8.65 lakh crore in December, 2018 to Rs 7.9 lakh crore, while loan recoveries rose from Rs 78,000 crore in FY18 to Rs 1,21 lakh crore in FY19.

The RBI also said the average lag between the date of occurrence of frauds and its detection by banks was at 22 months.

Other reports by Click Lancashire

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