Mega PSU Bank Merger: Smaller Banks to Merge with SBI, BoB, and PNB by FY 2027
The Indian government is planning a massive consolidation of public sector banks (PSBs). Plan is to merge smaller lenders with larger banks. According to reports, Indian Overseas Bank (IOB), Central Bank of India (CBI), Bank of India (BOI), and Bank of Maharashtra (BoM) may be merged with State Bank of India (SBI), Bank of Baroda (BoB), and Punjab National Bank (PNB) by FY 2027.
Key Highlights of the Banks Merger
Merger Plan: The government aims to create stronger, more efficient banks that can support credit expansion and financial sector reforms.
NITI Aayog Recommendations: The plan aligns with NITI Aayog’s suggestions to retain only a few large state-run lenders, including SBI, PNB, BoB, and Canara Bank.
Previous Consolidation: Between 2017-2020, 10 PSBs were merged into 4 larger entities, reducing the number of state-owned banks from 27 to 12.
Benefits of the Merger:
Improved Operational Efficiency:
Streamlined operations and reduced costs
Enhanced Credit Availability: Stronger banks can provide more credit to support economic growth
Increased Competitiveness: Better equipped to compete with private banks and fintech firms
Timeline for the merger:
FY 2027: Discussions and deliberations on the merger plan are expected to continue
Cabinet and PMO Approval: The plan will be reviewed by senior officials and the Prime Minister’s Office before formal announcements are made .
Sudheendra Kumar ( Mobile /WhatsApp: 91-9820088394)
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