The Centre has ruled out considering any merger plan of the public sector banks (PSBs). Union Minister of State for Finance Pankaj Chaudhary clarified it in a written reply in the Rajya Sabha.
He said that steps taken by the government has strengthened the financial condition of PSBs and the risk of recurrence of excessive stress has been minimized through several reforms instituting checks and controls in the banking space.
Choudhary further said that PSU banks have shown improvement in their capital adequacy ratio and gross non-performing assets position post-merger.
With an aim to make state-owned lenders global-sized banks, the Modi government had announced four major mergers of public sector banks in August 2019. It virtually started in 2017 and the cumulative effect of the mergers brought down the total number of PSBs from 27 to 12.
The government had started with merging five associate banks of SBI and Bharatiya Mahila Bank with the State Bank of India and followed it up by merging Dena Bank and Vijaya Bank with the Bank of Baroda in 2019.
Similarly United Bank of India and Oriental Bank of Commerce were merged with Punjab National Bank; Syndicate Bank with Canara Bank; Allahabad Bank with Indian Bank; and Andhra Bank and Corporation Bank with Union Bank of India, effective April 1, 2020.
