New Delhi: In an effort to boost liquidity in the economy and bring about banking reforms, Finance Minister Nirmala Sitharaman on Friday announced merger of Indian Bank and Allahabad Bank to create the 7th largest public sector bank in India with Rs 8.08 lakh crore business.
The combination will now have 6,104 branches along with 42,814 employees in total. With today's merger of public sector banks (PSBs), the total of number of state-owned banks in the country would come down to 12 from 27 in 2017.
During the first term in office, Narendra Modi government announced the merger of five associate banks and Bharatiya Mahila Bank with State Bank of India in April 2017. The recent merger of Bank of Baroda (BoB), Dena Bank and Vijaya Bank, which is effective from April this year, was second development in this regard.
Rajeev Kumar, the finance secretary, during the same event said that there will be no retrenchment due to the merger and every employee will benefit out of this.
The FM said with the merger of these banks, the bigger banks 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.
This announcement comes a week after Sitharaman announced a slew of measures to give a fillip to the economy.
The finance minister last week addressed a similar press conference and announced an array of reforms including a rollback of enhanced surcharge on foreign portfolio investors levied in Budget 2019, lifting the angel tax on start-ups, a package to assuage the bleeding auto sector and an injection of Rs 70,000 crore into public sector banks amongst others in its bid to boost economic growth.