Ten Public Sector Undertaking (PSU) banks will be amalgamated into four banks from today, 1 April. In the biggest consolidation exercise in the banking space, the government in August 2019 had announced the merger of 10 public sector lenders into four bigger and stronger banks. With this, the number of public sector banks in India will come down to 12 from 27 in 2017. It was widely speculated that the government may defer the consolidation exercise for some time due to the novel coronavirus pandemic that has impacted our economy.
Here is all you need to know about the mega merger of PSU banks that will come into force from 1 April:
1) Oriental Bank of Commerce (OBC) and United Bank of India will be merged into Punjab National Bank (PNB). After the merger, these together will form the second-largest public sector bank in the country, after State Bank of India (SBI).
2) Syndicate Bank will be merged into Canara Bank, which will make it the fourth-largest public sector lender.
3) Indian Bank will be merged with Allahabad Bank.
4) Union Bank of India will be merged with Andhra Bank and Corporation Bank
5) Customers, including depositors of merging banks will be treated as customers of the banks in which these banks have been merged with effect from 1 April 2020.
6) After the merger, there will be 12 PSUs - six merged banks and six independent public sector banks.
-Six merged banks - SBI, Bank of Baroda, Punjab National Bank, Canara Bank, Union Bank of India, Indian Bank
-Six independent banks - Indian Overseas Bank, Uco Bank, Bank of Maharashtra, Punjab and Sind Bank, Bank of India, Central Bank of India.
7) The Oriental Bank of Commerce and United Bank of India will operate as the branches of the Punjab National Bank from tomorrow (1 April 2020).
8) Syndicate Bank will function as the branch of Canara Bank effective 1 April 2020.
9) Similarly, all Allahabad Bank branches will be treated as branches of the Indian Bank
10) All branches of Andhra Bank and Corporation Bank will function as Union Bank of India branches with effect from today i.e. 1 April, 2020.
Earlier this month the cabinet gave its approval for the mergers that will consolidate operations of 10 public sector banks (PSBs) into four 'mega banks'.