The government has announced the merger of ten public sector banks into four banks. It announced the merger of Oriental Bank of Commerce and United Bank with Punjab National Bank as well as the merger of Canara Bank and Syndicate Bank.
The merger of Union Bank of India, Andhra Bank and Corporation Bank and the consolidation of Indian Bank with Allahabad Bank was also announced. Briefing media in New Delhi yesterday, Finance Minister Nirmala Sitharaman said that government wants a strong financial system to make the country a five trillion economy.
The Finance Minister said, after the merger of banks, the country will now have 12 public sector banks instead of 27. She said, the profitability of public sector banks has improved and total gross non-performing assets have come down to 7.9 lakh crore rupees in March this year from 8.65 lakh crore rupees in December last year.
She also clarified that no retrenchment has taken place post-merger of Bank of Baroda, Dena Bank and Vijaya Bank and staff has been redeployed and best practices in each bank have been replicated in others.
Ms Sitharaman also unveiled governance reforms in public sector banks, saying their boards will be given autonomy and enabled to do succession planning.
The Finance Minister said, the government is trying to build next-generation banks and eight PSBs have launched repo-linked loans in last one week. Ms Sitharaman said, there will be no interference in the bank’s commercial decisions. She said, loans above 250 crore rupees are being closely monitored.