Modi govt may soon announce mega merger plan for public sector banks: Report

The government is charting out a mega merger plan for public sector banks (PSBs) and could make an announcement anytime now, as per a report by CNBC-TV18.

Chief executives of ten PSBs have been called for a meeting on August 30 by the finance ministry's department of financial services. The list includes Punjab National Bank, Union Bank, Canara Bank, United Bank of India, Allahabad Bank, Indian Bank, Oriental Bank of Commerce, Syndicate Bank, Corporation Bank and Andhra Bank.

As per a Business Standard report, Punjab National Bank, Union Bank of India and Canara Bank might be banks which will be subsuming other PSBs. “It looks like PNB will be merged with three more banks, including Andhra Bank and Oriental Bank of Commerce,” a source told BS.

The government has already consulted the central bank on the subject earlier this year, sources additionally told the paper. According to the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980, the Centre is required to consult the Reserve bank of India in order to formulate and implement a plan for PSB mergers.

Sources told CNBC-TV18 that Finance Minister Nirmala Sitharaman is likely to brief the media on the consolidation plan. In her recent media briefings, Sitharaman has hinted of multiple measures the government is working on, apart from the ones already announced, to revive the economy.

Sitharaman is also expected to make announcements on measures to boost homebuyer sentiment, among other things, on August 30.

Apart from the RBI, FM Sitharaman and Commerce and Industry Minister Piyush Goyal are a part of the group of ministers (referred to as alternative mechanism) that also needs to approve the merger plan.