Merger of 4 major PSBs to consolidate their businesses
No of PSBs to come down from 27 to 12
14 PSBs reported profit in Q1FY20
New Delhi: Finance Minister Nirmala Sitharaman, on Friday, announced a number of steps to give fillip to banking and financial sector, led by merger of Public Sector Banks (PSBs) to bring down their number from 27 to 12.
Addressing a media conference here, she said Oriental Bank of Commerce (OBC) and United Bank of India will be merged with Punjab National Bank (PNB) to create the second largest PSB with a combined business of nearly Rs.18 lakh crore per annum. Similarly, Canara Bank and Syndicate Bank will be merged to create the fourth largest PSB with a combined business of Rs. 15.20 lakh crore.
Union Bank of India, Andhra Bank and Corporation Bank will be merged to create a PSB with a total business amounting to Rs.14.59 lakh crore and Indian Bank and Allahabad Bank’s merger will create the seventh largest PSB with a business of Rs. 8.08 lakh crore, she said.
Sitharaman said the PSBs’ Boards will be given flexibility to finalize sitting fee of independent directors. The Non-Banking Financial Companies (NBFCs) have been provided partial credit guarantee windows.
The PSBs’ gross bad loans have come down from Rs.8.65 lakh crore to Rs.7.9 lakh crore as on December 31, 2018.
Asked about the PSBs’ performance, she said due to the ongoing reforms, 14 of them have reported profit in the first quarter of 2019-20.