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Finance Minister announces series of State-run Bank mergers, AIBOC condemns the merger
August 30: Finance Minister Nirmala Sitharaman announced a big consolidation of public sector banks: 10 public sector banks to be merged into four. Under the scheme of amalgamation, Punjab National Bank, Oriental Bank of Commerce and United Bank ((PNB will be the anchor bank) will be merged into a combined entity with a total consolidated business of Rs 17,95,000 crore.
Likewise, Union Bank, Andhra Bank and Corporation Bank (anchor bank – Union Bank of India) will be merged into a single entity that will have a combined business of Rs 14,59,434 crore.
Canara Bank and Syndicate Bank (anchor bank – Canara Bank) will separately be combined into a single bank that will command a combined business of 15,20,295 crore.
Similarly, Indian Bank and Allahabad Bank (anchor bank – Indian Bank) will be merged to form a single bank where the amalgamated entity will have a business of Rs 8,07,859 crore.
In place of 27 public sector banks in 2017, now there will be 12 public sector banks after the latest round of consolidation of PSU banks. The consolidation of public sector banks will give them scale, the finance minister said. Last year, the government had approved the merger of Vijaya Bank and Dena Bank with Bank of Baroda (BoB) that become effective from April 1, 2019. In 2017, the State Bank of India absorbed five of its associates and the Bharatiya Mahila Bank.
Meanwhile, the All India Bank Officer’s Confederation (AIBOC), the apex body of the bank officers’ trade union movement in the country expressed its outright opposition to the wholesale merger of public sector Banks announced by the Finance Minister Nirmala Sitharaman. In a press release issued by Soumya Datta, General Secretary of AIBOC, it was stated that, “The justification for bank mergers given by Hon’ble Finance Minister is apparently misplaced. The creation of 4 news banks by merging 10 PSBs is a clear diversion of attention from the core issue of NPA recovery. We will again build up a countrywide resistance against this wholesale bank merger move.”