The government on Wednesday approved a scheme for the amalgamation of 10 state-owned banks into four, putting to rest any doubts about a possible delay in the process.
Effective from April 1, 2020, the balance sheets as well as stocks of these banks will be integrated, according to the scheme of amalgamation approved by the Union Cabinet.
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Punjab National Bank (PNB), Oriental Bank of Commerce, and United Bank of India will combine to form the nation’s second-largest lender. Canara Bank will take over Syndicate Bank; Union Bank of India is planned to be amalgamated with Andhra Bank and Corporation Bank; and Indian Bank will subsume Allahabad Bank.
“Businesses and industry will benefit through an increased lending capacity, with the regulatory ceiling for lending to individual borrowers increasing by over Rs 1,500 crore to Rs 3,000 crore,” a senior finance ministry official said, adding that the banks would be able to support specialised loan products, such as supply chain financing and cash management services.
The banks will swing into action to take the process forward. The first step will be to approve the swap ratio for stocks, with anchor banks expected to hold board meetings in the coming days. PNB is scheduled to hold its board meeting on Thursday.
Source: Business Standard
