Finance Minister Niramala Sitharaman on 30 August 2019 announced measures for the banking sector. Sitharaman said the government is trying to create big next generation banks. She said that government has decided to merge Punjab National Bank, Oriental Bank of Commerce and United Bank; Canara Bank and Syndicate Banks; Union Bank of India, Andhra Bank and Corporation Bank; and Indian Bank and Allahabad Bank. Last week, the Finance Minister had announced a slew of measures to revive economic growth from a five-year low. She had announced rollback of super-rich tax on foreign and domestic equity investors, exemption of startups from 'angel tax', a package to address distress in the auto sector and upfront infusion of Rs 70,000 crore into public sector banks, in an effort to boost growth.
- After the amalgamation, only 12 PSBs will be left in India from the 27 earlier. Consequent to the merger, Punjab National Bank will become the second largest PSB in India with a total business of Rs 17.5 lakh crore.
- Additionally, the total business of the merged entity of Canara Bank and Syndicate Bank will be Rs 15.20 lakh crore. It will become the fourth largest PSB in the country.
- Consolidated Indian & Allahabad Banks to be 7th largest PSB with Rs 8.08 lakh crore business. Strong scale benefits to both with business doubling. High CASA & lending capacity combined in consolidated bank.
- Consolidated Union+Andhra+Corporation Banks to be 5th largest PSB with Rs 14.6L Cr. business & 4th largest branch network in India. Strong scale benefits to all 3 with biz becoming 2 to 4½ times that of individual bank.
- PNB, OBC and United Bank to be merged. Canara and Syndicate Bank will also be merged.
- Merger of Union Bank of India, Andhra Bank and Corporation Bank will be merger.
- Indian Bank and Allahabad Bank merged.
- Government's intention not just to give capital but also give good governance.
- There is no government interference in commercial decisions of banks.
- Gross NPA level has come down heavily.
- Govt monitoring large loans to avert frauds.
- Sanctioning and monitoring of loans are separated.
- Special agencies formed to monitor loans above Rs 250 crore to avoid a Nirav Modi like situation.
- Eight public sector banks have launched repo-rate linked loans in the last one week.
- Four NBFC have already found liquidity solution through a settlement with banks.
- Govt taking steps to make a clear path to achieve a target of $5 trillion economy.