New Delhi: A week after announcing a series of measures to boost economic growth and improve investor sentiment, finance minister Nirmala Sitharaman on Friday announced consolidation of 10 state-run lenders into four bigger banks.
In a bid to give further fillip to the economy, Friday saw Finance Minister Nirmala Sitharaman briefing the media flanked by top ministry officials once again. This time the focus was on strengthening public sector banking in the country. Taking a big step on consolidation of public sector banks. The Minister announced the merger of 10 PSBs into 4 larger banks.
4 MEGA PSBS CREATED
— Oriental Bank of Commerce & United Bank have been merged with Punjab National Bank
— Syndicate Bank has been merged with Canara Bank
— Andhra Bank & Corporation Bank have been merged with Union Bank of India
— And Allahabad Bank has been merged with Indian Bank
After these mergers, the total number of PSBs shrinks from 27 till 2017 to 12 now. The Finance Minister said the intent behind these mergers is to create big next generation banks.
The Finance Minister said the government made a series of big step measures last week and most have begun to be implemented by now.
She said liquidity support to NBFCs and housing finance companies has improved as the partial credit guarantee scheme has been executed.
Infusion of Rs. 3,300 crore has already been made and another Rs. 30,000 crore is in the pipeline.
The Minister also several administrative reforms vis a vis PSBs.
She added that due to the government’s reforms in recent years not only gross NPAs of PSBs have come down but 18 of 14 PSBs have turned around from making losses to profit.
The government’s intent related to PSBs’ consolidation is clear, it expects big banks with enhanced capacity to increase credit coupled with bigger risk appetite.
They will have both national presence & global reach to maximise opportunities for making India a $ 5 Trillion economy by 2024.