The Cabinet in its meeting on Wednesday is likely to approve the merger scheme of 10 public sector banks along with the amendments to the Companies Act, according to CNBC-TV18.
“Cabinet in today’s meet likely to have approved merger of 10 PSU banks and amendments to Companies Act,” a tweet by CNBC-TV18 said. The Cabinet may also approve decriminalisation of 43 Sections under the Companies Act, while also approving foreign listing of domestic companies, another tweet by CNBC-TV18 said. Reportedly, tweaks in the FDI (foreign direct policy) policy for aviation were also cleared ahead of the divestment of stake in Air India.
The merger scheme of the lenders’ balance sheets, as per the proposal placed on 30 August 2019, was scheduled to be completed by 1 April. The exercise, once completed, will reduce the total number of public sector lenders in the country from 27 in 2017 to 12.
According to the proposal, Oriental Bank of Commerce and United Bank would be merged into Punjab National Bank (PNB), which will make PNB India’s second biggest public sector bank after SBI.
Syndicate Bank will be merged with Canara Bank, thereby creating India’s fourth largest public sector bank. Union Bank, Andhra Bank and Corporation Bank will be merged together to create fifth largest public sector bank. And Indian Bank and Allahabad Bank will be merged to form India’s seventh largest public sector bank.
On 15 February, finance minister Nirmala Sitharaman had said there was no reason to go back on the decision of the PSU banks’ merger, refuting any particular reason behind the “delay” in notifying the final scheme of the amalgamation, after speculations emerged that the merger might be put off beyond the intended date of 1 April 2020.