Keeping up pace with its efforts to revive the economy and markets, the Narendra Modi government may announce on Friday a mega-merger plan for public sector banks, according to a CNBC TV18 report.
The finance ministry’s department of financial services called a meeting on Friday with chief executives of 10 public sector banks, including Punjab National Bank, Union Bank, Canara Bank, United Bank of India, Allahabad Bank, Indian Bank, Oriental Bank of Commerce, Syndicate Bank, Corporation Bank and Andhra Bank.
The report said finance minister Nirmala Sitharaman is likely to brief the media soon on the merger plan for banks. Sitharaman, during her media address last week, had hinted that more relief measures were underway which will help in reviving the economy.
The Nifty PSU Banking index was trading higher by 1% at on 3:15 pm Friday. Major gainers included smaller PSU banks like Jammu and Kashmir Bank (up 13%), Oriental Bank of Commerce (up 9%), Syndicate Bank (up 7%), Central Bank and Allahabad Bank (up 4.5% each) and Indian Bank (up 4.2%). Bigger banks like Punjab National Bank was down 0.3% and State Bank of India slipped 0.1%.
A Business Standard report said that Punjab National Bank, Union Bank of India and Canara Bank might be the banks which will subsume other public sector banks. “It looks like PNB will be merged with three more banks, including Andhra Bank and Oriental Bank of Commerce,” the report said quoting a source. The report added that the government has already consulted the Reserve Bank of India on the matter earlier this year.
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