Photo Gallery: Indian banking sector undergoes major mergers
The BJP-led Narendra Modi government made major banking reform measure on Friday by announcing the merger of 10 Public Sector Banks (PSBs) into four entities. This is the second press conference by the finance minister in the last two weeks. Sitharaman had made a slew of announcement last week, the most prominent being relief from enhanced surcharge from long and short term capital gains arising from transfer of equity, shares/units referred in section 111A and 112A respectively. The Budget had proposed levy of an additional surcharge on individuals and trusts earning more than Rs 2 crore and Rs 5 crore, respectively. The other announcements included measures for banks & MSMEs, releasing Rs 70,000 cr of capital upfront for bank capitalisation; simplification of GST filing, increase in NHB funding and several major announcements related to the uplift of the auto sector.
Addressing a press conference in the national capital Finance Minister Nirmala Sitharaman said Punjb National Bank, Oriental Bank and United Bank will be merged to become the second largest PSU Bank in India. Canara Bank and Syndicate Bank will be merged into one entity to be 4th largest PSB, while Union Bank of India, Andhra Bank and Corporation Bank will be amalgamated into a single entity to be the 5th largest PSB; and Indian Bank and Allahabad Bank will become one entity to be the 7th largest PSB. The Finance Minister further said that the Bank of India and Central Bank of India would remain independent. After the amalgamation, only 12 PSBs will be left in India from the 27 earlier. Punjab National Bank will become the second largest PSB in India with a total business of Rs 17.5 lakh crore post the merger while that of the Canara Bank and Syndicate Bank will be Rs 15.20 lakh crore. Consolidated Union, Andhra and Corporation Banks will have a total business of Rs 14.6 lakh crore while consolidated Indian and Allahabad Banks will have a total business of Rs 8.08 lakh crore.