Canara Bank and Syndicate Bank Merger to Form Fourth-largest Public Sector Bank, Says Finance Ministry
While Canara Bank has business worth Rs 10.4 lakh crore, Syndicate Bank has business worth Rs 4.7 lakh crore. With 10,342 branches across the country, the two banks together will form the third-largest branch network.
Image for representation.
New Delhi: In line with the NDA government’s plans to bring about banking reforms, the Finance Ministry on Friday announced the merger of Canara Bank and Syndicate Bank, both financial institutions that predominantly operate in the southern states.
The two banks will be consolidated to form the fourth-largest public-sector bank with business of Rs 15.2 lakh crore. The Canara Bank has business worth Rs 10.4 lakh crore and the Syndicate Bank Rs 4.7 lakh crore. With 10,342 branches across the country, the two banks together will form the third-largest branch network.
Finance Minister Nirmala Sitharaman said that benefits of merging these two banks will include cost reduction due to network overlaps, similar culture to enable smooth consolidation, and cost saving and more income opportunities for joint ventures (JVs) and subsidiaries.
Canara Bank currently has 58,350 employees and the Syndicate Bank has 31,535 employees. The total strength of the two banks together will be 89,885 employees.
Sitharaman said the earlier bank mergers had shown that consolidated banks had shown rapid growth, high profit and valuation gains as a result of scale and synergy benefits. She added that the said banks would will play an important role in making India a $5-trillion economy — for that they needed more lending capacity so they could provide better services using modern technology.
"Consolidation is the way forward," she said.
Sitharaman said that with the merger of these banks, the bigger ones would focus on international markets, while middle-level banks would focus on the national market. The smaller banks would now focus on the regional markets, she said.
The minister said while there were 27 PSBs in 2017, there would just 12 banks from now on, which will be adequately financed.
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