Bank Merger 2.0: Work is going on at a fast pace on the merger of public sector banks in the country. For this, the government is discussing with RBI (Reserve Bank of India) and public sector banks. The Finance Minister says that the country now needs strong, big and reliable government banks. For this, first the government will have to sit and talk with the banks and see how they want to take it forward.
He further said, “We are also in discussion with the Reserve Bank on what is their view on creating big banks.” Addressing the 12th SBI Banking and Economics Conclave in Mumbai on November 6, the Finance Minister said, “A lot of work remains to be done before I say yes.” I have taken the decision and work has also started in this direction.
Why will banks be merged?
Emphasis is being laid on merger of banks so that the number of banks can be reduced and the banking system can be made more streamlined and simple. Its effect will be visible in the coming time in the form of improvement in the financial sector and the scope of giving loans will also increase. With the merger of government banks, small and medium sized government banks will be merged into big government banks. With this, the banking system will become stronger and structured.
Under Bank Merger 2.0, Indian Overseas Bank (IOB), Central Bank of India (CBI), Bank of India (BOI) and Bank of Maharashtra (BOM) can be merged with big banks like Punjab National Bank (PNB), Bank of Baroda (BoB) and State Bank of India (SBI).
These banks have been merged earlier
Earlier in the year 2019, the government had announced the merger of 4 PSU banks under Bank Merger 1.0. During this period, United Bank of India and Oriental Bank of Commerce were merged into Punjab National Bank. Syndicate Bank was merged with Canara Bank. Allahabad Bank was merged into Indian Bank. Also, Andhra Bank and Corporation Bank were merged into Union Bank of India. Apart from this, Dena Bank and Vijaya Bank were merged with Bank of Baroda. With this, the number of government banks in the country has reduced from 27 in 2017 to 12 now.
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