The Union government has no proposal to merge public sector banks (PSBs), CNBC-TV18 reported on May 17 citing a government official who declined to be named.
“No proposal to merge public sector banks, not aware of any such discussion,” the official told CNBC TV-18.
India currently has 12 state-run banks. The number was brought down after a mega merger exercise in 2020 when 10 state-run banks were merged into four. These include Punjab National Bank (PNB) which absorbed Oriental Bank of Commerce and United Bank, Canara Bank which absorbed Syndicate Bank, Union Bank of India which absorbed Andhra Bank and Corporation Bank and Indian Bank which merged with Allahabad Bank.
Also read: Are four PSBs merging?
Earlier on December 18, 2023, there were speculations of merger among Union Bank and UCO Bank, and Bank of India and Bank of Maharashtra. Later, the finance ministry clarified that this was a parliamentary committee on subordinate legislation and it had no connection with policies on bank mergers.
A document with details of a proposed merger between Union Bank and UCO Bank, and Bank of India and Bank of Maharashtra was circulated on X (formerly Twitter). The subject of the alleged government document was: 'Study Visit programme of the Committee on Subordinate Legislation, Lok Sabha to Mumbai and Goa from 2 to 6 January 2024.' It was put out in the name of Ramesh Yadav, undersecretary of the Government of India.
The document was issued to the governor of the Reserve Bank of India, chairman of Life Insurance Corporation of India, Insurance Regulatory and Development Authority of India, and National Bank for Agriculture and Rural Development.
It was shared with the managing directors and CEOs of UCO Bank, Bank of Maharashtra, Bank of India, and Union Bank of India. The document, in PDF form, was also addressed to the CMDs of New India Assurance Company, United India Insurance Company, Oriental Insurance Company, National Insurance Company, and the MD & CEO of SBI Life Insurance Company.
What was the clarification?
The finance ministry issued a clarification, saying that this was a document related to a parliamentary committee on subordinate legislation and that it had no connection whatsoever with the policies on bank mergers.
The agenda of the meeting was reportedly changed and the new agenda did not mention the word “merger”. In other words, there is no proposal for a merger between Union Bank of India and UCO Bank, Bank of India, and Bank of Maharashtra.
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