The government approved a scheme for amalgamation of 10 state owned banks into 4, putting to rest any doubts about a possible day in the process.An another bank merger is expected in 2020 to strengthen the economy
.Since April 1, 6 more public sector banks are disappeared in India. The central government decision is to merge 4 of the 10 largest Banks.
This is the third merging since the Modi government came to power. SBT was merged SBI with6 other banks. Vijaya bank and Dena Bank merged with Baroda Bank. The aim was to strengthen the wealth system. Public sector banks in India have shrunk to 12. There were about 27 public sector banks.
In 2020 April 1, the balance sheets as well as stocks of these banks will be integrated, the scheme approved by the Union Cabinet. The banks would be able to support a specialised loan products such as supply chain financing and Cash Management Services.
The banks to take the process forward. The first step will be to approve the swap ratio for stocks with anchor banks expected to hold board meeting in the coming days. The timeline for inviting comments from shareholders will be shorter than what was followed during the merger of Dena Bank and Vijaya Bank into Bank of Baroda, which came into effect on April 1, 2019. the amalgamation are being done so that customers reap benefits of larger banks.
Merging banks
- Oriental Bank of Commerce and United Bank of India combined to form Punjab National Bank. Punjab National Bank International will be the second largest lender.
- Canara Bank will take over Syndicate Bank. Canara bank will be the forth largest lender.
- Union Bank of India planned to be amalgamated with Andhra bank and Corporation Bank. Union Bank of India will be the the largest network.
The new banks provide new passbook and ATM. Didn’t change the account number but change the IFSC code. Change the rules the interest and minimum charges. Do not change the FD but after the maturity, change the new rules. Do not change the interest in loans.