PSB merger on cards: Punjab National Bank, Union Bank & Bank of India likely to amalgamate

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The Centre is likely to invite selected lenders for a discussion on next round of merger in public sector banks, according to a finance ministry official.

The lenders to be included in the discussion may include Punjab National Bank (PNB), Union Bank of India and Bank of India (BoI).

According to the Economic Times report, sources suggest that the government would not wait for too to initiate the process.

The official also revealed that if the lenders are not able to come up with suitable options then the alternate mechanism (AM) group can make suggestions.

In October 2018, the Centre had proposed the merger of three banks namely Bank of Baroda, Vijaya Bank and Dena Bank, to create India’s third-biggest lender through an alternate mechanism. Both Vijaya and Dena are now amalgamated with BoB.

In February 2019, the Reserve Bank of India had removed the names of Bank of India, Oriental Bank of Commerce and Bank of Maharashtra from its PCA framework, a measure which imposes certain lending restrictions on financially weak banks.

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