Minister of state for finance Anurag Singh Thakur said that the government is open to further consolidation of banks depending on needs. Last year, the government had announced the amalgamation of 10 public sector banks into four. This exercise will create six global-sized banks, effective April, and will bring down the number of public sector banks to 12 from 27 in 2017.
“We have successfully done the mergers and recapitalisation of the banks. Insolvency and Bankruptcy Code (IBC) has been successful, which has brought back more than £40 billion to banks. Further consolidation or merger will depend on the need,” Thakur said in an interview.
Creation of global-sized banks through consolidation will facilitate the government’s resolve to make India a $5-trillion economy by 2024-25, he said. Bigger banks would have wider reach, stronger lending capacity and better products and technology to serve customers. In August 2019, the government had announced the merger of United Bank of India and Oriental Bank of Commerce with Punjab National Bank, making the proposed entity the second largest public sector bank. It was also decided to merge Syndicate Bank with Canara Bank, and Allahabad Bank with Indian Bank. Andhra Bank and Corporation Bank are to be consolidated with Union Bank of India. In April 2019, Bank of Baroda, in a first three-way merger, amalgamated Vijaya Bank and Dena Bank with itself. SBI had merged five of its associate banks and Bharatiya Mahila Bank with itself in 2017.