Indian banking sector undergoes major mergers

Canara Bank Syndicate Bank to merge to become 4th largest public sector bank

"Neither, it is the case that a weak bank is merged with a strong one nor geographically compatible banks are being merged", All-India Bank Employees Association said in a statement.

The declaration came after the government announced the mega-merger of 10 PSU banks into four entities, where the Punjab National Bank (PNB), the Oriental Bank of Commerce and the United Bank will merge to become the second-largest public sector bank (PSB) while the Canara Bank and the Syndicate Bank will amalgamate to set up the fourth-largest PSU banking entity.

The government also announced the merger of Indian Bank with Allahabad Bank.

The second largest banking conglomerate will now be a united Punjab National Bank, the Oriental Bank and the United Bank with a business of Rs 17.95 lakh crore.

"At this point in time, when stability is the need of the hour, the government itself is attempting to destabilise the finance and economy", the statement said.

The new entity will have 11,437 branches.

Financial sector and banks are the topics for today's meet, announces Nirmala Sitharaman.

The initial response to the government's initiative has been positive and encouraging, said the finance minister adding that the interaction with the industry stakeholders and others would be a continuing process.

Canara Bank and Syndicate Bank will merge; Union Bank of India, Andhra Bank and Corporation Bank will come together while Indian bank will merge with Allahabad Bank.

Loan recoveries have reached record levels., says Ms. Sitharaman and adds it has crossed Rs. 1.21 lakh crore in FY19.

The Minister also said that to avoid Nirav Modi like frauds in the PSBs, the SWIFT messaging system has now been linked with the core banking system.

She further 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.

This announcement comes a week after Sitharaman announced a slew of measures to give a fillip to the economy.

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