Govt mulls consolidation, 21 PSU banks to come down to 12

Bank Merger

The Central Government is yet again all set for consolidation and as per its plan, 21 public sector banks may come down to 12.

Reportedly, public sector banks like Punjab National Bank, Bank of Baroda, Canara Bank and Bank of India could look for potential candidates for acquisition.

In addition to this, some region-centric banks like Punjab and Sind Bank and Andhra Bank will continue as independent entities.

“There would be at least 3-4 banks of the size of State Bank of India (SBI), the country’s largest lender,” said an official.

“Government is “actively working” towards consolidation of public sector banks but declined to provide details, saying this was a price-sensitive information. Enthused by the success of SBI merger, the finance ministry is considering clearing another such proposal by this fiscal if bad loan situation comes under control by then,” said Arun Jaitley, Union Minister, Ministry of Finance, last month.

“Factors like regional balance, geographical reach, financial burden and smooth human resource transition have to be looked into while taking a merger decision, “ said the official.

In a similar consolidation,  five associate banks and Bharatiya Mahila Bank (BMB) became part of SBI on 1 April, 2017, crowning the country’s largest lender to among the top 50 banks in the world.

State Bank of Bikaner and Jaipur (SBBJ), State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP) and State Bank of Travancore (SBT), besides BMB, were merged with the largest public sector lender, SBI. Post the merger, the total customer base of SBI mounted to around 37 crore with a branch network of around 24,000 and nearly 59,000 ATMs across the country. The merged entity geared its operation with deposit base of over Rs 26 trillion and advances level of Rs18.50 trillion.

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