The mechanism by which two or more corporations plan to combine to become a single entity, frequently with a new name, rather than remaining independently owned, and run, is known as a merger.
The integration aids in the reduction of weaknesses and the acquisition of a strategic advantage in the industry. During a merger, the combining firms exchange information about debt, finances, technology, and properties, among other things.
According to the finance minister, merger assists to manage capital more significantly. The amalgamation of Public sector banks is based on the bad loans intensity and regional factors. The merger facilities enable the incorporation of global-sized banks. Additionally, it also restructures and redefines the country’s banking space.
Here are some of the latest mergers of banks in India, and the ones that are the most evident. The government had announced there would be Public Sector Bank Merger, and after the merger, there are now 12 public sector banks. Ten PSU banks were amalgamated into four banks.
|Bank Merger List
|Punjab National Bank
Oriental Bank of Commerce
United Bank of India
|The Punjab National Bank combines the Oriental Bank of Commerce (OBC) and the United Bank of India (UBI) (PNB).
As a result of this merger, the PNB will now be India’s second-largest public sector bank in terms of branch network, after the State Bank of India. There will be 11,437 outlets, and the PNB’s overall business will be Rs. 17.95 lakh crore.
|Canara Bank and Syndicate Bank are combined. Canara Bank will become India’s fourth-largest public sector bank after this merger. With a branch strength of 10,342, Canara’s overall company will be worth 15.20 lac crore.
Thanks to network overlap, this integration would lower operating costs. Since these two banks have identical work cultures, a seamless integration should be possible.
Union Bank of India
|Union Bank of India merges Andhra Bank and Corporation Bank. Union Bank of India will become the fifth-largest public sector bank merger in India. This acquisition has the potential to raise the business of the post-merger bank by 2-4.5 times.
Union Bank of India’s gross business will be Rs. 14.59 lac crore after the merger, with a total of 9,609 branches.
|The Indian bank will be combined with Allahabad Bank in the fourth merger. Allahabad Bank will become India’s seventh-largest public sector bank after the merger. The overall company of Allahabad bank after the merger will be Rs. 8.08 lac crore, with 6,104 branches.
As a result of the integration of the two banks, the size of their company will double, increasing their global competitiveness.
|Bank of Baroda
|Vijaya Bank and Dena Bank were merged with Bank of Baroda with effect from April 1, 2019. The customers of BoB’s will now have access to 8,248 domestic branches and around 10,318 ATMs across India.
|State Bank of India (SBI)
State Bank of Bikaner and Jaipur + State Bank of Mysore + State Bank of Patiala + Bharatiya Mahila Bank + State Bank of Travancore State Bank of Hyderabad
|State Bank of India (SBI) was merged with Bharatiya Mahila Bank and its associate banks in the year 2017. Its Combined Domestic Branches now total up to 24,000 approx.
|The merger of HDFC into HDFC Bank was announced on 4th April 2022. In terms of market capitalisation, this merger will lead to making it the third-largest entity in India.
|Benefits to Bank Mergers:
|Benefits to Banks through Mergers: