The mega merger of 10 PSU banks into 4 large entities has come into effect from April 1, 2020. However, how their depositors and borrowers will get impacted?
Rather than being an exception, merger and amalgamation of banks have become a norm in current times. In fact, amalgamation of several banks has taken place in recent years, which is aimed at facilitating consolidation among PSBs (Public Sector Banks) to create competitive and strong banks which are capable of achieving economies of scale and realisation of synergy benefits with wider product and service offering for customers.
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For instance, the amalgamation of Vijaya Bank and Dena Bank into Bank of Baroda (BoB), effected on April 1, 2019, is a case in point. And now the mega merger of 10 PSU banks into 4 large entities has come into effect from April 1, 2020. The amalgamation of PNB (Punjab National Bank), UBI (United Bank of India) and Oriental Bank of Commerce, which came into effect from April 1 this year, will create the second largest nationalized bank of the country — both in terms of business and branch network. Similarly, Syndicate Bank has been merged with Canara Bank, while Allahabad Bank has been amalgamated with Indian Bank, and Andhra Bank and Corporation Bank has been consolidated with UBI.
Source: Financial Express
