10 PSU banks merge into 4 amid COVID-19 lockdown

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Six banks - Oriental Bank of Commerce and United Bank of India, Syndicate Bank, Andhra Bank, Corporation Bank and Allahabad Bank - have ceased to exist following the merger.

The new financial year began with six public sector banks merging into four in what is considered as India’s biggest ever consolidation in the public sector banking.

Six banks - Oriental Bank of Commerce and United Bank of India, Syndicate Bank, Andhra Bank, Corporation Bank and Allahabad Bank have ceased to exist following the merger.

While the Oriental Bank of Commerce and United Bank of India have merged into Punjab National Bank; Syndicate Bank into Canara Bank; Andhra Bank and Corporation Bank into Union Bank of India; and Allahabad Bank into Indian Bank.

The 21-day-lockdown following the COVID-19 outbreak has raised apprehension among customers about the services. However, heads of the anchor banks said they had factored the situation in the merger plan.

"We don't foresee any problem it is going as per the plan. Certain modification in implementation has been made to ensure that there is not any disruption for employees and customers. We are ensuring zero disruption," Union Bank of India Managing Director Rajkiran Rai G told PTI.

The anchor banks have postponed some part of the implementation and processes due to the lockdown. "For merging banks, we have not changed some of the process like loan process etc, which we proposed to do earlier. However, because of the prevailing situation we will be continuing old system till the situation comes under control," the Union Bank executive said.

Following the consolidation, there will be seven large public sector banks (PSBs), and five smaller ones. There were as many as 27 PSBs in 2017. The total number of public sector banks in the country will come down from 18 to 12 beginning next financial year.

The merger of Oriental Bank and United Bank into Punjab National Bank will make the merged entity the second-largest state-run bank in the country with a business of Rs 17.95 lakh crore and 11,437 branches. The amalgamation of Syndicate Bank into Canara Bank will create the fourth-largest public sector bank with Rs 15.20 lakh crore business and a network of 10,324 branches.

The Union Bank of India will become the fifth largest public sector bank with Rs 14.59 lakh crore business and 9,609 branches following merger of Andhra Bank and Corporation Bank. Similarly, the merger of Allahabad Bank with the Indian Bank will create the seventh-largest public sector bank with Rs 8.08 lakh crore business (with inputs from agencies).

Image Credit: Business Today

 

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