The amalgamation of ten public sector bank will be effective from today, 1 April. Announcing the biggest merger plan in the banking domain, the centre in August 2019, presented the plan of merging 10 public sector lenders into four banks.
With this consolidation, the number of public sector banks in India has now dropped down to 12 from 27 in 2017. Speculations pertaining to centre’s deferment in the process due to the outbreak of coronavirus was doing rounds but the Finance Minister Nirmala Sitharaman in her last media address clarified that the merger will proceed as per the plan.
What will change after the merger on April 1?
1) Oriental Bank of Commerce (OBC) and United Bank of India will be consolidated into Punjab National Bank (PNB). After the merger, these two lenders will form the second-largest public sector bank in the country, after State Bank of India (SBI).
2) Syndicate Bank will now be a part of Canara Bank, which will make it the fourth-largest public sector lender.
3) Indian Bank will be amalgamated with Allahabad Bank.
4) Union Bank of India will be merged with Andhra Bank and Corporation Bank
5) Customers, including depositors of merging lenders will be treated as customers of the banks in which these banks have been amalgamated with effect from 1 April 2020.
6) Post the merger, there will be 12 Public Sector Banks, six merged banks and six independent public sector banks.
-Six merged banks are State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, Union Bank of India, Indian Bank
-Six independent banks are Indian Overseas Bank, Uco Bank, Bank of Maharashtra, Punjab and Sind Bank, Bank of India, Central Bank of India.
7) The Oriental Bank of Commerce and United Bank of India will now be operating as the branches of the Punjab National Bank from tomorrow (1 April 2020).
8) Syndicate Bank will function as the branch of Canara Bank effective 1 April 2020.
9) Similarly, all Allahabad Bank branches will be now treated as branches of the Indian Bank
10) All branches of Andhra Bank and Corporation Bank will function as Union Bank of India branches with effect from today i.e. 1 April, 2020.
Earlier this month the cabinet gave the go-ahead for the mergers that will amalgamate operations of 10 public sector banks (PSBs) into four ‘mega banks’.