Tackling bad loan stress: Govt may merge 27 PSU banks to improve efficiency
9 years ago

Tackling bad loan stress: Govt may merge 27 PSU banks to improve efficiency

Firstpost  

The government will consider merging some of its more than two dozen state-run banks, as it seeks to improve efficiency at the ailing lenders that dominate the nation’s banking sector. Bankers have “strongly supported” the idea of consolidation, suggesting the government form a panel of experts to devise a merger strategy, Arun Jaitley said after a two-day annual brainstorming event of industry leaders and officials from the central bank and finance ministry. Jaitley said on Saturday it was too early to say how many state-run banks would emerge at the end of a consolidation process and declined to give any timeline for the shake-up. Among other measures, Jaitley said, the government was considering an employee stock option plan for state-run banks, where senior executives earn far less than their private sector counterparts.

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History of this topic

Revitalizing Cooperative Banking: Why Mergers May And May Not Catalyse The Industry Towards Better Profits
2 months ago

Revitalizing Cooperative Banking: Why Mergers May And May Not Catalyse The Industry Towards Better Profits

Live Law  

When the world observed 2012 as the international year of cooperatives, India witnessed the failure of 13 cooperatives. In India, the Kerala state government's merger of 14 district cooperative banks into the Kerala Bank, has not only improved financial stability but also enhanced service delivery in rural areas. The RBI's role in mergers of larger banks suggests that it could …

India: Centre rules out new PSU bank mergers
3 months, 3 weeks ago

India: Centre rules out new PSU bank mergers

Deccan Chronicle  

New Delhi: The Centre may not consider merger of public sector banks as several reforms undertaken by the government in the banking sector have created systemic improvements and instituted checks and controls to minimise the risk of recurrence of excessive stress, the government said on Tuesday. “The reforms undertaken by the government in the banking sector have created systemic improvements …

Congress: Any move to reduce govt stake in 12 public sector banks will be resisted
8 months ago

Congress: Any move to reduce govt stake in 12 public sector banks will be resisted

The Hindu  

The Congress on July 19 said any move to bring down the Union government's stake in 12 public sector banks to less than 51 per cent would continue to be resisted forcefully both in Parliament and outside. Over the past seven years, there have been mergers in the public sector banking industry, Mr. Ramesh pointed out "United Bank of India …

Government may introduce amendments to laws to push banking sector reforms in Budget session
8 months, 1 week ago

Government may introduce amendments to laws to push banking sector reforms in Budget session

The Hindu  

The government is likely to introduce amendments to Banking Regulation Act 1949 and other laws to push banking sector reforms during the upcoming Budget session. Apart from this, amendments in the Banking Companies Act, 1970, and the Banking Companies Act, 1980 are needed for privatisation of public sector banks, sources said. Amendments, if approved by Parliament, would help bring down …

If One Megabank Collapses, the US Economy Goes With It. Should We Have More?
1 year ago

If One Megabank Collapses, the US Economy Goes With It. Should We Have More?

Politico  

And the government has so far taken a more or less incoherent position on what it would like the banking system to look like in another 15 years. “You need to have a view of where the industry is headed in order to come up with wise decisions on blocking or permitting a particular merger,” said Daniel Tarullo, who wrote …

India’s growing economy needs bigger banks
1 year, 1 month ago

India’s growing economy needs bigger banks

Live Mint  

Finance minister Nirmala Sitharaman has said that India needs more banks the size of State Bank of India, or even larger. As our economy grows, lending capacity must expand and large lenders can lend larger sums without asset-concentration risk. In 2019, the government decided to merge at least 10 state-run banks to create four larger ones. Also expected was a …

FinMin revises letter, scotches PSU bank merger speculation
1 year, 3 months ago

FinMin revises letter, scotches PSU bank merger speculation

Live Mint  

The Union finance ministry has rectified the agenda of a parliamentary committee meeting scheduled for early next year, putting an end to speculation of a potential merger of public sector banks—UCO Bank with Union Bank of India, and Bank of India with Bank of Maharashtra. In a letter addressed to, among others, the bank chiefs of the four PSU banks …

‘PSU banks’ bad-loan additions may moderate’
4 years ago

‘PSU banks’ bad-loan additions may moderate’

The Hindu  

Indian state-owned lenders are expected to see additions to bad loans moderate, but structural issues at the banks could cap returns on their stocks, Morgan Stanley said on Thursday. “Over the past few years, state-owned enterprise banks have seen significant capital infusion by the government, lower risk-weighted assets’ density, higher provisioning and some large recoveries,” the brokerage said in a …

Centre likely to bring amendments to two legislations to facilitate privatisation of PSU banks
4 years, 1 month ago

Centre likely to bring amendments to two legislations to facilitate privatisation of PSU banks

Firstpost  

New Delhi: To facilitate the privatisation of public sector banks, the government is likely to bring amendments to two legislations later this year. Finance Minister Nirmala Sitharaman while presenting Budget 2021-22 earlier this month had announced the privatisation of Public Sector Banks as part of disinvestment drive to garner Rs 1.75 lakh crore. “Other than IDBI Bank, we propose to …

Govt to amend two Acts to enable privatisation of PSU banks
4 years, 1 month ago

Govt to amend two Acts to enable privatisation of PSU banks

India TV News  

To facilitate privatisation of public sector banks, the government is likely to bring amendments to two legislations later this year. The ongoing Budget session is scheduled to take up as many as 38 Bills including the Finance Bill 2021, Supplementary Demands for Grants for 2020-21 and related Appropriation Bill, National Bank for Financing Infrastructure and Development Bill, 2021, and Cryptocurrency …

New NPA Cycle, Privatisation Among Ailments in Banking that Union Budget 2021 is Expected to Address
4 years, 1 month ago

New NPA Cycle, Privatisation Among Ailments in Banking that Union Budget 2021 is Expected to Address

News 18  

With the Union Budget due to be presented on Monday, stakeholders in the banking sector expect the Centre to go beyond recapitalisation of bonds to infuse capital in public sector banks. The RBI’s stress test recently revealed that bank NPAs could jump from 7.5 per cent in September last year to 13.5 per cent by September this year. The gross …

New NPA Cycle, Privatisation Among Ailments in Banking that Union Budget 2021 is Expected to Address
4 years, 1 month ago

New NPA Cycle, Privatisation Among Ailments in Banking that Union Budget 2021 is Expected to Address

News 18  

With the Union Budget less than a week away, stakeholders in the banking sector expect the Centre to go beyond recapitalisation of bonds to infuse capital in public sector banks. The RBI’s stress test recently revealed that bank NPAs could jump from 7.5 per cent in September last year to 13.5 per cent by September this year. The gross non-performing …

AIBOC Opposes Merger of LVB with DBS Bank, Pitches for Merger With State-owned Bank
4 years, 4 months ago

AIBOC Opposes Merger of LVB with DBS Bank, Pitches for Merger With State-owned Bank

News 18  

A day after the RBI put in public domain a draft scheme of merger of Lakshmi Vilas Bank with subsidiary of Singapore-based DBS, public sector banks’ officer union AIBOC on Wednesday said the amalgamation is not in the national interest and demanded the consolidation with any PSB. The proposed amalgamation of the cash-strapped LVB with DBS Bank India seems to …

Rajan, Acharya may be off mark: PSU banks need strategy and focus to survive, not privatisation as remedy
4 years, 6 months ago

Rajan, Acharya may be off mark: PSU banks need strategy and focus to survive, not privatisation as remedy

Firstpost  

The PSU banks’ problem is often linked to India’s burgeoning fiscal deficit that needs control because pumping taxpayer money into state-run banks is fraught with risks. It is interesting that two of India’s biggest brand-name economists, former Reserve Bank governor Raghuram Rajan and former deputy governor Viral Acharya, have spoken for the “re-privatisation” of public sector banks even as the …

'Privatise Select PSU Banks, Dilute Role of DFS': Raghuram Rajan Calls for Reforms
4 years, 6 months ago

'Privatise Select PSU Banks, Dilute Role of DFS': Raghuram Rajan Calls for Reforms

News 18  

Former RBI Governor Raghuram Rajan on Monday suggested the government to privatise select public sector banks, set up a bad bank to deal with NPAs and dilute the role of Department of Financial Services. “Winding down Department of Financial Services in the Ministry of Finance is essential, both as an affirmative signal of the intent to grant bank boards and …

Mega PSU bank merger marks new dawn for Indian banking space: Finance ministry
4 years, 11 months ago

Mega PSU bank merger marks new dawn for Indian banking space: Finance ministry

Firstpost  

The biggest-ever consolidation exercise in the public sector banking space effected on Wednesday will mark a new dawn for the Indian banking sector, the Finance Ministry said on Wednesday New Delhi: The biggest-ever consolidation exercise in the public sector banking space effected on Wednesday will mark a new dawn for the Indian banking sector, the Finance Ministry said on Wednesday. …

Mega-Merger Of PSU Banks To Be Effective From Today; Key Points
4 years, 11 months ago

Mega-Merger Of PSU Banks To Be Effective From Today; Key Points

ABP News  

According to the scheme, Oriental Bank of Commerce and United Bank of India will be merged into Punjab National Bank; Syndicate Bank into Canara Bank; Allahabad Bank into Indian Bank; and Andhra and Corporation banks into Union Bank of India. Branches of Oriental Bank of Commerce and United Bank of India will operate as branches of Punjab National Bank; Syndicate …

PSB mergers the new hurdle for resolutions under IBC
4 years, 11 months ago

PSB mergers the new hurdle for resolutions under IBC

Live Mint  

The approaching deadline for the merger of small public sector banks with their larger counterparts is slowing down resolution of cases under the Insolvency and Bankruptcy Code. While small state-run banks generally have limited influence in lender committees of large assets, in cases where they have a substantial say, key decisions on resolution are being postponed until the ongoing mergers …

Amalgamation of 10 public sector banks into 4 from April 1: Sitharaman
5 years ago

Amalgamation of 10 public sector banks into 4 from April 1: Sitharaman

India TV News  

Amalgamation of 10 public sector banks into 4 from April 1: Sitharaman ​The Union Cabinet on Wednesday approved amalgamation of 10 public sector banks, including Allahabad Bank, Andhra Bank and OBC, to create large four state-owned lenders with effect from April 1, Finance Minister Nirmala Sitharaman said. The Union Cabinet on Wednesday approved amalgamation of 10 public sector banks, including …

Ten public sector banks' merger to come into effect from 1 April, says Nirmala Sitharaman – Firstpost
5 years ago

Ten public sector banks' merger to come into effect from 1 April, says Nirmala Sitharaman – Firstpost

Firstpost  

New Delhi: The Union Cabinet on Wednesday approved amalgamation of 10 public sector banks, including Allahabad Bank, Andhra Bank and OBC, to create large four state-owned lenders with effect from 1 April, Finance Minister Nirmala Sitharaman said. As per the mega consolidation plan, Oriental Bank of Commerce and United Bank of India will merge into Punjab National Bank; Syndicate Bank …

Mega bank consolidation: Meeting 1 April deadline appears challenging with approvals, clearances still pending
5 years, 1 month ago

Mega bank consolidation: Meeting 1 April deadline appears challenging with approvals, clearances still pending

Firstpost  

According to a senior banker, information technology integration of Vijaya Bank and Dena Bank with Bank of Baroda is still in process even after 10 months of merger. Mumbai: With the deadline of 1 April fast approaching for the mega merger of 10 public sector banks, there seems to be more odds in the way of meeting the target date …

Govt likely to notify merger of 10 PSU banks this week; all lenders to complete amalgamation procedures by April
5 years, 1 month ago

Govt likely to notify merger of 10 PSU banks this week; all lenders to complete amalgamation procedures by April

Firstpost  

The banks will need to follow regulatory formalities to protect the interest of minority shareholders. The government is expected to notify the merger of 10 public sector banks that it had announced last year to create four big banks this week and the merger process may be completed by April, said a news report. Union Bank, Andhra Bank, Corporation Bank …

No job losses post merger of 10 PSBs: Government
5 years, 3 months ago

No job losses post merger of 10 PSBs: Government

India TV News  

The government on Tuesday assured the Rajya Sabha that merger of 10 public sector banks will not lead to any job losses and employees' interest will be protected. During the Question Hour, Minister of State for Finance Anurag Singh Thakur said lending and other banking services to eastern states will be improved after two Kolkata-based banks are merged. "Amalgamating banks …

Strategic sale in 5 PSUs: Govt’s messed up fiscal math has just got a major face-saver; privatisation drive positive for economy
5 years, 4 months ago

Strategic sale in 5 PSUs: Govt’s messed up fiscal math has just got a major face-saver; privatisation drive positive for economy

Firstpost  

The stake will be brought down in select PSUs to 51% while retaining the management control on a case-to-case basis, the government said. One of the key prerequisites for any country aspiring for sustainable economic development—government’s firm willingness to cede control in public sector undertakings and bring in more private participation—is finally taking place in growth-starved Indian economy. In a …

Over 3,400 branches of 26 public sector banks closed or merged in last 5 years: RTI
5 years, 4 months ago

Over 3,400 branches of 26 public sector banks closed or merged in last 5 years: RTI

Firstpost  

Over 3,400 branches of 26 public sector banks have been either closed or merged during the last five financial years due to merger under the consolidation exercise in the banking space, revealed an RTI query Indore: Over 3,400 branches of 26 public sector banks have been either closed or merged during the last five financial years due to merger under …

Over 3,400 branches of 26 PSBs closed or merged in last 5 years: RTI
5 years, 4 months ago

Over 3,400 branches of 26 PSBs closed or merged in last 5 years: RTI

India TV News  

Over 3,400 branches of 26 public sector banks have been either closed or merged during the last five financial years due to merger under the consolidation exercise in the banking space, revealed an RTI query. Of this, 75 per cent of the affected branches belong to the country's biggest lender State Bank of India. To a query under the Right …

No concern to asset quality post UBI, OBC merger: PNB CEO
5 years, 6 months ago

No concern to asset quality post UBI, OBC merger: PNB CEO

India TV News  

The Punjab National Bank, which is the anchor bank for a scheduled merger with the United Bank of India and the Oriental Bank of Commerce, has said that it does not see any erosion in asset quality after the merger and the best HR, process and products will be chosen for the consolidated entity to offer a win-win situation for …

PNB merger to create second largest PSU bank from 1 April. 10 things to know
5 years, 6 months ago

PNB merger to create second largest PSU bank from 1 April. 10 things to know

Live Mint  

In its bid to create "NextGen banks", the finance ministry has decided to merge 10 public sector banks into four. The merger of United Bank of India and Oriental Bank of Commerce with Punjab National Bank will give birth to India's second largest public sector bank after the State Bank of India. The PNB merger, which will make the bank …

Mega mergers fail to lure funds to state-run bank stocks
5 years, 6 months ago

Mega mergers fail to lure funds to state-run bank stocks

Live Mint  

Singapore: India’s biggest bank overhaul in decades to merge state-run lenders beset with bad loans and low capital hasn’t convinced investors to increase holdings of the shares. “State run banks do have a large asset-quality burden,” said Rukhshad Shroff, who oversees more than $660 million in India equities at JPMorgan Chase & Co.’s asset management unit in Hong Kong. There …

12 PSU banks almost right for India, says Finance Secretary
5 years, 6 months ago

12 PSU banks almost right for India, says Finance Secretary

Live Mint  

New Delhi: The amalgamation of 10 public sector banks into four has nearly ended the consolidation process and created almost the right number of banks to cater to the needs of the aspirational and new India, Finance Secretary Rajiv Kumar said This exercise will create six global size banks and will bring down the number of nationalised public sector banks …

Mega bank mergers in India credit positive but...: Here is global rating agency Moody's take
5 years, 6 months ago

Mega bank mergers in India credit positive but...: Here is global rating agency Moody's take

India TV News  

The mega merger of 10 state-run banks is credit positive, as it can increase their operational scale and growth capital, apart from improving their corporate governance over the long term, says a report. Global rating agency Moody's in a report Thursday said the proposed mergers will significantly alter the structure of state-run banks which control over two-thirds of the system. …

Market punishes PSU banks
5 years, 6 months ago

Market punishes PSU banks

Deccan Chronicle  

Mumbai: The mega bank merger, announced by the government last Friday, has not gone down well with investors, who dumped public sector bank shares, when the market opened after a three-day break on Tuesday. While analysts have largely praised the government’s vision of merging these banks based on their common technology platforms and other synergies, investors and market participants credit …

Watch | Merger of public sector banks
5 years, 6 months ago

Watch | Merger of public sector banks

The Hindu  

In what comes as the second wave of the government’s efforts to revive the economy, Finance Minister Nirmala Sitharaman on Friday announced a slew of banking reform measures, including merger of 10 public sector banks into four entities. This would take the number of banks in the country from 27 in 2017 to 12, Ms. Sitharaman said. These bank mergers, …

PSB stocks plunge up to 10.6% post merger announcement
5 years, 6 months ago

PSB stocks plunge up to 10.6% post merger announcement

India TV News  

Public sector bank stocks, led by Canara Bank, Union Bank and Punjab National Bank, tumbled up to 10.6 per cent on Tuesday after the government announced the merger of 10 state-run lenders into four. Shares of Canara Bank dropped 10.59 per cent, Union Bank of India fell 9.08 per cent, Punjab National Bank plunged 8.55 per cent, Oriental Bank of …

Mixed reactions from brokerage firms on banking merger
5 years, 6 months ago

Mixed reactions from brokerage firms on banking merger

India TV News  

Brokerage firms on Tuesday said that by and large the consolidation in the banking sector is a positive move, yet it can weigh on the merging entities in the near term. State Bank of India, Bank of Baroda and leading private sector banks would edge the merging banks to be in a stronger position. Kotak Securities said: "Our thesis remains …

PSU banks merger woes: Bank officers associations to meet in Delhi on 5 September
5 years, 6 months ago

PSU banks merger woes: Bank officers associations to meet in Delhi on 5 September

Firstpost  

Hyderabad: Opposing the merger of banks, officers associations of various banks will meet in the national capital on 5 September to chalk out the future course of action, a top official of All India Andhra Bank Officers Association said here on Tuesday. Finance Minister Nirmala Sitharaman last week announced the merger of Oriental Bank of Commerce and United Bank with …

PSU banks lose on BSE post merger announcement
5 years, 6 months ago

PSU banks lose on BSE post merger announcement

India TV News  

State-run banks on the exchanges traded on a weak note during the early trade on Tuesday after the government announced plans to merge 10 public sector banks into four. Punjab National Bank which will be merged with the Oriental Bank of Commerce and United Bank of India, fell over 7 per cent, the most among the state-run banks constituting the …

Opinion | Bank mergers are no silver bullet for India
5 years, 6 months ago

Opinion | Bank mergers are no silver bullet for India

Live Mint  

With every passing day, India’s economic indicators are turning a little bleaker. Thus, one of the few areas where there’s new investment may be affected, especially with a sharp rise in debt levels of the government agency that gives out the contracts. State Bank of India, the largest lender, will require ₹15,000 crore in the current fiscal year, according to …

PSU bank mergers: Consolidation is no panacea as social banking goals remain with state in a vulnerable economy
5 years, 6 months ago

PSU bank mergers: Consolidation is no panacea as social banking goals remain with state in a vulnerable economy

Firstpost  

Some of the fundamental objectives for which banks were nationalised in the first place remain critical for managing India’s complex economy. Two decades ago, public sector bank executives had to be persuaded to lend more in the aftermath of the Indian Bank scam when they started fearing investigations by law enforcers such as the Central Board of Investigation into what …

Public sector banks' merger to act as building block for $5 trillion economy target, says Finance Secretary Rajiv Kumar
5 years, 6 months ago

Public sector banks' merger to act as building block for $5 trillion economy target, says Finance Secretary Rajiv Kumar

Firstpost  

The government on Friday unveiled a mega plan to merge 10 public sector banks into four as part of plans to create fewer and stronger global-sized lenders New Delhi: The government’s decision to consolidate 10 public sector banks into four mega state-owned lenders will act as a building block for achieving $5 trillion economy target, Finance Secretary Rajiv Kumar has …

There will not be single job loss due to merger of banks: FM Sitharaman
5 years, 6 months ago

There will not be single job loss due to merger of banks: FM Sitharaman

Live Mint  

Chennai: Finance minister Nirmala Sitharaman on Sunday allayed fears of job losses following the proposed merger of public sector banks, saying not even one employee shall be removed following the amalgamation. The move will bring down the number of state-run banks to 12 from 19 after the merger of Dena Bank and Vijaya Bank with Bank of Baroda effective April …

Bank employees stage protest against Centre's decision to merge PSU banks
5 years, 6 months ago

Bank employees stage protest against Centre's decision to merge PSU banks

India TV News  

Members of the All India Bank Employees' Association on Saturday staged a protest here against the Centre's decision to merge 10 public sector banks into four entities. Employees of all public and private sector banks wore black badges to work as a mark of protest to the government's decision. The BJP government at the Centre had on Friday unveiled a …

All India Bank Employees Association opposes government's bank merger
5 years, 6 months ago

All India Bank Employees Association opposes government's bank merger

India TV News  

The real agenda of the government in merging banks is to help big corporates as consolidation of the banks will not result in recovery of huge bad loans, said a top official of the All India Bank Employees' Association. Opposing the merger of 10 public sector banks into four, C. H. Venkatachalam, General Secretary of AIBEA, in a statement issued …

Banks merger reflects govt resolve to address economic slowdown: India Inc
5 years, 6 months ago

Banks merger reflects govt resolve to address economic slowdown: India Inc

India TV News  

The government's move to consolidate public sector banks indicates its resolve to address the slowdown in GDP growth, as the country's economy expanded at its weakest pace in over six years in the April-June quarter of 2019-20, the industry said on Friday. A sharp deceleration in manufacturing output and subdued farm sector activity pulled down India's gross domestic product growth …

Merger can't tackle issues of low capital,higher NPAs:Analysts
5 years, 6 months ago

Merger can't tackle issues of low capital,higher NPAs:Analysts

India TV News  

Even though the mega-merger of 10 public sector banks is a step in the right direction as it will increase operational efficiencies of the merged entities, the key issues of low capital and higher bad loans will continue to plague them, say analysts. Amidst the growing signs of deepening slowdown, finance minister Nirmala Sitharaman Friday announced four new set of …

Finance Minister Sitharaman announces big mergers between PSU banks
5 years, 6 months ago

Finance Minister Sitharaman announces big mergers between PSU banks

Op India  

Union Finance Minister Nirmala Sitharaman briefed the media on Friday afternoon making some significant announcements. Finance Minister Nirmala Sitharaman: After today’s announcement post consolidation, India will now have 12 Public Sector Banks from 27 Public Sector Banks. She stated, “Punjab National Bank, Oriental Bank of Commerce and United Bank will be brought together and they shall form the second largest …

Govt unveils mega bank mergers to revive growth from 5-yr low
5 years, 6 months ago

Govt unveils mega bank mergers to revive growth from 5-yr low

India TV News  

The government on Friday unveiled a mega plan to merge 10 public sector banks into four as part of plans to create fewer and stronger global-sized lenders as it looks to boost economic growth from a five-year low. Finance Minister Nirmala Sitharaman, who had last week announced tax sops and measures for sectors such as auto, announced four new set …

After merger, there will be 12 PSU banks: Here is the full list
5 years, 6 months ago

After merger, there will be 12 PSU banks: Here is the full list

Live Mint  

The government on Friday unveiled a mega plan to merge 10 public sector banks into four as part of plans to create fewer and stronger global-sized lenders as it looks to boost economic growth from a six-year low. Oriental Bank of Commerce and United Bank merger will merge into Punjab National Bank to create a bank with ₹17.95 lakh crore …

What will change, what won’t for account holders as 10 PSU banks are merged into 4
5 years, 6 months ago

What will change, what won’t for account holders as 10 PSU banks are merged into 4

Hindustan Times  

Finance Minister Nirmala Sitharaman on Friday announced a slew of PSU bank mergers as part of consolidation efforts and said, “We want banks with strong national presence and enhanced risk appetite.” Finance Minister Nirmala Sitharaman during a media briefing on the Gross Domestic Product Index at the National Media Centre in New Delhi on Friday. The banks mergers announced by …

Mega bank merger announcement: Govt to amalgamate 10 public sector banks into four large entities
5 years, 6 months ago

Mega bank merger announcement: Govt to amalgamate 10 public sector banks into four large entities

Firstpost  

After the bank merger, only 12 PSBs will be left in India from the 27 earlier After the announcement of the foreign direct investment, in a major reform measure, the Central government on Friday amalgamated 10 public sector banks into four entities, bringing down their total number to 12 from 27 in 2017, a move aimed at making state-owned lenders …

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