NEWS PSBs NIRMALA
NEW DELHI: In a new demonstration of the Modi government’s determination to speed up governance process and set wrongs right, announcement came on Friday that a set of public sector banks in the second and third lines will be merged into new and stronger entities. This is hoped to make the balance sheet of banks stronger and lending capacity higher. Last year, the Dena Bank and Vijaya Bank had been merged with Bank of Baroda, creating the third-largest bank in terms of loans disbursement.
As per the decisions announced on Friday, Oriental Bank of Commerce and United Bank will merge with Punjab National Bank. The merger will make it the second largest PSB, with Rs 17.95 lakh crore business and 11,437 branches. Syndicate Bank will merge with Canara Bank to create the fourth largest public sector bank with a Rs 15.20 lakh crore business.
Union Bank, Andhra Bank and Corporation Bank would merge to become the nation’s fifth largest public sector bank with Rs 14.59lakh crore business.
Bank of India and Central Bank will not be affected, and so too the lead bank, the State Bank of India. Nirmala Sitharaman said, “Partial credit guarantee scheme for NBFCs have been executed. Some Rs 3,300 crore by way of liquidity support has been granted and Rs 30,000crore more would be given. Friday’s announcement brings down the number of nationalised PSBs to 12 from 27.
The idea, finance minister Nirmala Sitharaman said, is to prepare the country to turn itself into a $5trillion economy. The steps are seen as the third round of consolidation of the financial transactions sector, in the face of a mounting Non-Performing Assets (NPAs) crisis caused by bad debts, or unpaid loans by business sharks. Bad debts of PSBs were of the total order of Rs 10 lakh crore, which has been reduced in the past few years to the level of Rs 8lakh crore, even as the scenario remains critical.
After the mergers, India will have 12 public sector banks, including State Bank of India and Bank of Baroda. Also, Indian Overseas Bank, Uco Bank, Bank of Maharashtra and Punjab and Sind Bank, which have strong regional focus, will continue as separate entities.
Oriental Bank of Commerce and United Bank to merge with PNB to become the second largest bank in the country after State Bank of India. Indian Bank and Allahabad Bank to merge to create 7th largest public sector bank with Rs 8.08 lakh crore business.Union Bank, Andhra Bank, Corporation Bank to merge to become India’s 5th largest public sector bank with Rs 14.59lakh crore business; Canara Bank would merge with Syndicate Bank to create the 4th largest public sector bank with Rs 15.20lakh crore business. ==Agencies, IHN-NN
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