Public sector lender Canara Bank has given its in-principle approval to the amalgamation with Syndicate Bank. On August 30, Nirmala Sitharaman had announced the merger of ten Public Sector Banks (PSBs) into four mega scale banks.
“The Board of Directors of the Bank in its meeting held today, considered and decided to give its “in-principle approval” for amalgamation of Canara Bank and Syndicate Bank, as advised by the Alternative Mechanism of Government of India vide its letter dated 30.08.2019 and to commence the process of amalgamation subject to applicable approvals,” said Canara Bank during its BSE filing.
Canara Bank has been appointed as the anchor bank in this amalgamation. The merged entity will create the fourth largest public sector lender in India with a business worth Rs 15.2 lakh crore. Merger of Canara Bank and Syndicate Bank will also constitute the third largest branch network in India with 10,342 branches.
The NPA ratio of the amalgamated lenders is expected to be around 5.62 percent, as compared to 5.37 percent for Canara Bank and 6.16 percent for Syndicate Bank, as on August 30, 2019.
The amalgamated lenders will have a workforce of 89,885 employees – 58,350 from Canara Bank and 31,535 from Syndicate Bank. The central government has promised that there will be no job cuts during or after the merger.