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Govt announces mega merger of public sector banks

Newdelhi:30/8/19:The government today announced the merger of ten public sector banks into four banks. It announced the merger of Oriental Bank of Commerce and United Bank with Punjab National Bank as well as the merger of Canara Bank and Syndicate Bank.

The merger of Union Bank of India, Andhra Bank and Corporation Bank and the consolidation of  Indian Bank with Allahabad Bank was also announced. Briefing media in New Delhi, Finance Minister Nirmala Sitharaman while announcing mega state-run bank consolidation plan, said that government wants a strong financial system to make the country a five trillion economy.

She said, the merger of PNB, Oriental Bank of Commerce, United Bank will form the second-largest public sector bank with 17.95 lakh crore rupees business.

She said, the consolidation of Canara Bank and Syndicate Bank will make the  4th largest public sector banks. The merger of Union Bank, Andhra Bank and  Corporation bank will form India’s 5th largest public sector bank with  14.59 lakh crore rupees business. She said, Bank of India, Central Bank of India will continue to be as public sector banks.

The consolidation of Indian Bank with Allahabad Bank will become the 7th largest bank with the business of about eight lakh crore rupees. SBI continues to be the biggest bank of the country while Bank of  Baroda continues to be the third-largest.

The Finance Minister said, after today’s announcement about the merger of banks, the country will now have 12 public sector banks instead of 27. She said, the profitability of public sector banks has improved and total gross non-performing assets have come down to  7.9 lakh crore rupees in March this year from 8.65 lakh crore rupees in December last year.

The Minister also said that to avoid fugitive  Nirav Modi like frauds in the PSBs, the SWIFT messaging system has now been linked with the core banking system. She also clarified that no retrenchment has taken place post-merger of Bank of Baroda, Dena Bank and Vijaya Bank and staff has been redeployed and best practices in each bank have been replicated in others.

Ms Sitharaman also unveiled governance reforms in public sector banks, saying their boards will be given autonomy and enabled to do succession planning. She said, bank boards will be given the flexibility to fix the sitting fee of independent directors adding that non-official directors will perform role analogous to independent directors.

She said, post-consolidation, boards will be given the flexibility to introduce chief general manager level as per business needs and they will also recruit chief risk officer at market-linked compensation to attract the best talent. Ms Sitharaman said, there is a need to strengthen the foundation of the banking sector. She said, the government is taking steps to clear the path to achieve five trillion dollar economy and reforms will fundamentally reboot Public Sector Banks functioning.

The Finance Minister said, the government is trying to build next-generation banks and eight PSBs have launched repo-linked loans in last one week. Ms Sitharaman said, there will be no interference in the bank’s commercial decisions. She said, loans above 250 crore rupees are being closely monitored.

About Editor in chief

Ashok Palit has completed his graduation from Upendranath College Soro, Balasore and post graduation from Utkal University in Odia Language and literture.. He has also carved out a niche for himself as a scribe of eminence after joining the profession in 1988. He is also an independent media production professional. He brings loads of experience to Advanced Media, Ashok Palit as a cineaste has been active in film criticism for over three decades. As a film society activist, he soared to eminence for his profound commitment to the art film appreciation and aesthetics of cinema. His mode of discourse is often erudite but always lucid and comprehensible marked by a perfect acumen so rare in the field. A film aesthete with an immense fond of critical sensibilities, he wrote about growth and development of odia cinema in New Indian Express, The Times of India, The Hindustan Times, The Asian Age and Screen. He has been working as an Editor for Cine Samaya from 2002-2004.. He had made solid contribution on cinema in many odia Dailies and weekly such as Samaj, Prajatantra, Dharatri, Samaya, Satabadi, and weekly Samaya.

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