The public sector banking universe
After the mega merger of State Bank of India (SBI) with five of its associate banks, the government has taken another step to consolidate public sector banks. While it has left the decision of mergers and acquisitions to individual bank boards, it also said the final decision will be based on commercial considerations. Capital constraints, asset quality and the creation of large banks are likely to be the yardsticks.
The chart below highlights the geographical presence of state-owned banks. The western and southern regions have the highest number of lenders; banks in the west are bigger in size. Note also that banks such as Punjab National Bank, Bank of Baroda, Union Bank of India, and Canara Bank have pan-India presence, along with a strong regional visibility. Post merger, SBI’s presence across India has further strengthened.