Addressing a press conference, Finance Minister Nirmala Sitharaman Friday announced a major merger of public sector banks. During her briefing, Sitharaman said the Punjab National Bank, Oriental Bank of Commerce and United Bank will merge to form the country's second-largest public sector bank with a business of Rs. 17.95 lakh crore.
The move aims to make state-owned lenders global sized banks, Finance Minister Nirmala Sitharaman said during her press conference.
Here are 10 things to note from Nirmala Sitharaman's briefing
- Public sector banks will be merged, which will bring down the total from 27 to 12. United Bank of India and Oriental Bank of Commerce will be merged with Punjab National Bank, making the proposed entity the second largest public sector bank (PSB).
- Syndicate Bank will be merged with Canara Bank
- Allahabad Bank will be amalgamated with Indian Bank
- Andhra Bank and Corporation Bank will be consolidated with Union Bank of India
- Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab and Sind Bank will continue to function as earlier as they have strong "regional focus"
- Punjab National Bank will now have a business size of Rs 17.94 lakh crore, making it the second-largest PSB after SBI with a business of Rs 52.05 lakh crore
- The consolidated Canara Bank will be the fourth-largest bank with business of Rs 15.2 lakh crore, followed by Union Bank of India at Rs 14.59 lakh crore.
- After subsuming Allahabad Bank, Indian Bank will be the seventh-largest state-lender with business size of Rs 8.08 lakh crore
- The profitability of public sector banks has improved and total gross non-performing assets have come down to Rs 7.9 lakh crore at end-March 2019 from Rs 8.65 lakh crore at end-December 2018
- The public sector banks will now be allowed to appoint chief risk officers at market-linked compensation to attract the best available talent. "Public sector banks' boards are empowered to recruit chief risk officer at market-linked compensation to attract best available talent," Nirmala Sitharaman said.
Watch Finance Minister Nirmala Sitharaman's full press conference here