Banking Reforms: Ten big public sector banks (PSBs) merged into four. India will now have 12 Public Sector Banks from 27 in 2017. The merger of banks was announced by Union Finance Minister Nirmala Sitharaman on August 30, 2019, while addressing a press conference. The Minister announced major initiatives and steps to accelerate the economic growth of India including the merger of several banks under the Bank Consolidation plan. The banks which are being merged together are Punjab National Bank, Oriental Bank of Commerce, United Bank of India, Indian Bank, Allahabad Bank, Canara Bank, Syndicate Bank, Union Bank of India, Andhra Bank and Corporation Bank.
Till now, there were 18 Public Sector Banks. After today’s announcement, India will be left with only 12 Public Sector Banks. There were 27 public sector banks in 2017. Only six banks showcased profitability in the 4th Quarter of 2018-19. This is not the first time that the Government is merging the banks together. Earlier, under the Banks Consolidation plan itself, the Government had merged all the entities of State Bank of India into one and merged Bank of Baroda, Dena Bank and Vijaya Bank as one single entity. The merger of these banks is aimed at making India a USD 5 trillion economy.
Banks to be merged together are:
- Punjab National Bank, Oriental Bank of Commerce, United Bank of India will be merged as one
- Canara Bank & Syndicate Bank
- Union Bank of India, Andhra Bank and Corporation Bank
- Indian Bank & Allahabad Bank
The Government targets 5 trillion economy through these bank reforms and consolidation. The Government would infuse Rs 55,250 Crore of capital in these 10 big banks for their credit growth and regulatory compliance to boost the economy. Apart from these merged banks, two public sector banks will continue to work as an independent body to strengthen national presence. These banks are Bank of India and Central Bank of India. Four regional banks will also continue to work independently to strengthen the regional focus. These are: Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab & Sind Bank
Details of Amalgamation of 10 Banks into 4 NextGen PSBs
| Head/Anchor Bank | Merged banks | Business Size (Rupees) | PSB Size |
| Punjab National Bank | Punjab National Bank Oriental Bank of Commerce United Bank of India | 17.94 Lakh crore | 2nd largest Bank |
| Canara Bank | Canara Bank Syndicate Bank | 15.20 Lakh crore | 4th largest Bank |
| Union Bank of India | Union Bank of India Andhra Bank Corporation Bank | 14.59 Lakh crore | 5th largest Bank |
| Indian Bank | Indian Bank Allahabad Bank | 8.08 Lakh crore | 7th largest Bank |
| State Bank of India (Merged earlier) | 52.65 Lakh crore | 1st largest bank | |
| Bank of Baroda (Merged earlier) | 16.13 Lakh crore | 3rd largest bank | |
Banks that will continue to work individually: Apart from these 10 merged entities, six banks will continue to work individually. Have a look at the details of these banks:
| Bank | Business Size |
| Bank of India | 9.03 Lakh crore (6th Largest Bank) |
| Central Bank of India | 4.68 Lakh crore |
| Indian Overseas Bank | 3.75 Lakh crore |
| UCO Bank | 3.17 Lakh crore |
| Bank of Maharashtra | 2.34 Lakh crore |
| Punjab & Sind Bank | 1.71 Lakh crore |
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