NEW DELHI, Dec 3: Minister of State for Finance Pankaj Chaudhary announced on Tuesday that the government is not contemplating any mergers of public sector banks.
Responding to a query in the Rajya Sabha, he elaborated that the government has implemented various measures to enhance the financial health of public sector banks (PSBs).
Chaudhary emphasized that the reforms initiated in the banking sector have led to significant improvements and established safeguards to reduce the chances of excessive stress reoccurring.
When asked about the possibility of merging public sector banks, he simply stated, “No sir.”
He also noted that PSU banks have seen positive changes in their capital adequacy ratios and in the status of gross non-performing assets since the mergers.
“The mergers have fostered better synergies, economies of scale, and technological integration, resulting in uniform enhancements across all key financial metrics,” Chaudhary added.
In a massive consolidation effort, the government had announced four significant mergers of public sector banks in August 2019, reducing the total number from 27 in 2017 to 12, aiming to position state-owned banks as global competitors.
The mergers included United Bank of India and Oriental Bank of Commerce merging with Punjab National Bank; Syndicate Bank merging with Canara Bank; Allahabad Bank merging with Indian Bank; and Andhra Bank and Corporation Bank merging with Union Bank of India, effective April 1, 2020.
Additionally, in 2019, Dena Bank and Vijaya Bank were merged with Bank of Baroda. Earlier, the government had merged five of SBI’s associate banks along with Bharatiya Mahila Bank into the State Bank of India. (PTI)
