Finance Minister Nirmala Sitharaman on Friday announced the merger of big government-owned banks. She said that Punjab National Bank, Oriental Bank of Commerce and United Bank will merge to acquire one unified identity.
Speaking to reporters in an emergency press conference, Sitharaman said that Canara Bank and Syndicate Bank are too will be merged. In other announcements of mergers, Sitharaman said that Union Bank, Andhra Bank and Corporation Bank will merge, while Indian Bank will merge with the Allahabad Bank, making it the seventh-largest bank in India.
The finance minister said that her government was ‘making path clear for $5 trillion economy’ through the announcement of mega bank mergers. Sitharaman said that the country will now have just 12 government-owned banks as opposed to 27 in the past.
She said that 14 out of 18 Public Sector Unit banks were running in profits.
She also said that loan recoveries had hit a record level of Rs.1,21,076 crore, while bad loans had come down from Rs. 8.65 lakh crore to Rs. 7.90 lakh crore.
Her announcement comes just days after the Reserve Bank of India announced that it had decided to transfer Rs 1.76 lakh crore to the central government.
The Indian economy has been hit by a prolonged economic slowdown with experts saying that the only way to recover from the current crisis was through big-ticketed economic reforms.