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The consolidation of public sector banks is expected to get fresh impetus as a few mid-sized and small state-run lenders are being considered for mergers with Punjab National Bank (PNB) and Canara Bank, two senior finance ministry officials told ThePrint.
The mid-sized lenders that have been identified for merger include Allahabad Bank, Andhra Bank, Bank of Maharashtra, Central Bank of India, Indian Overseas Bank, UCO Bank, United Bank of India and Union Bank of India, said one of the officials who didn’t wish to be named.
PNB and Canara Bank will separately lead the merger process with these banks, said the official.
With the Bank of Baroda merger with Vijaya Bank and Dena Bank already underway, the next phase of PSB consolidation is expected to begin early next year, said the second official who also spoke on condition of anonymity.
https://theprint.in/economy/smaller...a-bank-in-next-round-of-consolidation/233674/
The Reason Behind the Mergers and How Will They Affect You?
Source: https://trak.in/tags/business/2019/...9-smaller-banks-find-the-shocking-reason-why/
The mid-sized lenders that have been identified for merger include Allahabad Bank, Andhra Bank, Bank of Maharashtra, Central Bank of India, Indian Overseas Bank, UCO Bank, United Bank of India and Union Bank of India, said one of the officials who didn’t wish to be named.
PNB and Canara Bank will separately lead the merger process with these banks, said the official.
With the Bank of Baroda merger with Vijaya Bank and Dena Bank already underway, the next phase of PSB consolidation is expected to begin early next year, said the second official who also spoke on condition of anonymity.
https://theprint.in/economy/smaller...a-bank-in-next-round-of-consolidation/233674/
The Reason Behind the Mergers and How Will They Affect You?
- Combating bad loans and struggling to maintain credit growth, particularly industrial credit, gives rise to the consolidation of banks to nurse its balance sheets back to health and boost its capital raising ability.
- Small-scale banks have limited business operations, while larger banks reap the benefits of economies of scale. This can help the former to overhaul their business models and resolve liquidity issues.
- Mergers reduce costs of banking operations, with better NPA and Risk management.
- With a larger capital base and higher liquidity, the burden on the central government to recapitalize the public sector banks reduces.
- The geographical reach of banking widens with the merger of large public sector banks and leveraging on their expertise, with newer employees.
- Larger sized banks offer more products and services and help in the integrated growth of the banking sector, thus improving professional standards.
- The Indian banks shall gain greater recognition and a higher rating, as the focus now reduces on some most prominent banks.
Source: https://trak.in/tags/business/2019/...9-smaller-banks-find-the-shocking-reason-why/