Government eying merger of four Public Sector Banks amidst rising bad loans

These PSBs reportedly have a cumulative loss of Rs 21,646.38 crore for the financial year 2017-18.

Government eying merger of four Public Sector Banks amidst rising bad loans

New Delhi: Amidst Rising bad loans, the government is eying merger of four Public Sector Banks (PSBs) viz Bank of Baroda, IDBI Bank Ltd, Oriental Bank of Commerce and Central Bank of India, as per media reports.

These PSBs reportedly have a cumulative loss of Rs 21,646.38 crore for the financial year 2017-18, a Mint report said.

Non-performing assets (NPAs) touched Rs 8.31 lakh crore at end-December 2017. Gross NPAs of state-owned banks had crossed Rs 7.77 lakh crore at the end of December 2017, according to official data.

Currently, there are 21 PSU banks in the country, including State Bank of India (SBI).

Last year, the government had approved the merger of SBI's five associate banks with itself. In March, the Cabinet also approved the merger of Bharatiya Mahila Bank (BMB) with SBI.

Five associates and BMB became part of SBI on April 1, 2017, catapulting 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 SBI.

In other news, majority of banks are said to be under Prompt Corrective Action (PCA) framework of the Reserve Bank of India (RBI).  

As many as 11 banks, out of 21 state-owned banks are under the PCA of the Reserve Bank because of their weak financials. The 11 banks on the RBI's watchlist are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.

Together, these banks accounted for Rs 52,311 crore of the Rs 88,139-crore capital infusion plan (through bonds and budgetary support) announced by the government for 2017-18.

With PTI Inputs

 

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