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Govt Announces Merger of 27 Banks Into 12, Here’s The Highlights from FM’s Briefing

The merger of Punjab National Bank, Oriental Bank of Commerce and United Bank will form India’s second-largest bank after the State Bank of India

News18.com

Updated:August 30, 2019, 6:45 PM IST
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Govt Announces Merger of 27 Banks Into 12, Here’s The Highlights from FM’s Briefing
Finance Minister Nirmala Sitharaman addresses the media on August 30, 2019. (Image: Twitter/ANI)
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Finance Minister Nirmala Sitharaman on Friday announced the merger of 27 public sector banks into 12, the biggest being the merger of Punjab National Bank, Oriental Bank of Commerce and United Bank. The three banks together will merge to form India’s second-largest bank after the State Bank of India, with Rs 17.95 lakh crore business and 11,437 branches.

Here are the key highlights from the Finance Minister's Press Conference in Delhi today.

- There have been product launches by PSU banks post last week’s announcements, 8 PSU banks launched repo-linked loans in the last one week

- For NBFCs, partial guarantee scheme has been executed and 4 NBFCs have already found liquidity solutions through PSU banks Since Last Friday

- Government is working on strengthening PSU Banks and improving their governance. As of today, Rs 1.9 tn worth of credit is available in the economy

- Government has laid a strong foundation for the financial sector and have to bolster equity infusion to banks with a good governance footing

- Will announce measures to help credit growth and set up specialised agencies to monitor every loan above Rs 250 crore to ensure strong early warning system in

place. Fugitive Economic Offenders Act has been passed by the government

- Loan recovery is at record level; Rs 1,21,000 Cr recovered by banking system so far

- GNPAs have come down in the banking system to Rs 7.9 lakh crore, 14 out of 18 public sector banks are in profit-earning condition, of 18 PSBs, 14 have enhanced

profitability in Q1FY20 VS 6 IN Q4FY19

- No layoffs during the merger of BoB, Vijaya Bank and Dena Bank, the profitability of the merged entity has become better; poised for rapid growth

- Need banks with a strong national presence and global reach, the lending cost will come down with consolidation of banks

- PNB, OBC and United Bank to be merged, this will become the second-largest PSB and will see a business of `17.95 lakh Cr; 2nd Largest PSU Bank

- Canara Bank and Syndicate Bank to be merged making the 4th largest PSB

- Union Bank, Andhra Bank, Corporation bank to be merged and also Indian bank and Allahabad bank will be merged

- Indian bank to be merged with Allahabad bank to become 7th largest PSB

- Bank of India, Central Bank, IOB, UCO, Bank Of Maharashtra & Punjab Sind Bank to remain as before

- 4 mergers announced today will leave India with 12 strong PSU banks

- PSU banks allowed to recruit risk officers from the private sector at market-related salaries

- Board to develop a career plan for all senior positions, Chief Risk Officer will be adequately empowered to decide on matters & act

- Boards are given the flexibility to give residual service of 2 years for top appointments, bank board committees to get strengthened non-official directors to get higher sitting fees

- Risk Management Committees of banks to be empowered to veto management decisions and banks board bureau to conduct leadership programs for bankers

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