New Delhi: In what will form the fifth largest public sector bank post amalgamation, Finance Minister Nirmala Sitharaman on Friday announced consolidation plan for Union Bank of India, Andhra Bank and Corporation Bank into a single entity.
Sitharaman said that the merger of these state-owned banks would make it the fifth-largest bank of the country with a business of Rs 14.59 lakh crore, which is nearly two times of Union Bank of India.
Announcing the plan, Sitharaman said the merger will make the banks stronger and sustainable as well as increase their lending ability. The three banks will, however, continue to work independently post-merger, she said.
With the merger of public sector banks (PSBs), the total number of state-owned banks in the country would come down to 12 from 27.
During his first term in office, Narendra Modi government had announced the merger of five associate banks and Bharatiya Mahila Bank with State Bank of India in April 2017, which was the first off the block. The recent merger of Bank of Baroda (BoB), Dena Bank and Vijaya Bank, which is effective from April this year, was second development in this regard.
Rajeev Kumar, the finance secretary, during the same event, said that there will be no retrenchment due to the merger and every employee will benefit out of this.
The FM said with the merger of these banks, the bigger banks would focus on international markets, while middle-level banks would focus on the national market. The smaller banks would now focus on the regional markets, she said.
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