Fin Min announces mega merger of 10 PSU banks into four

New Delhi, Aug 31 (KNN) Aiming to improve financial health of banks and enhancing their lending capacity to support growth, the Finance Minister Nirmala Sitharaman has announced the mega-merger of 10 public sector banks into four.

Under the scheme of amalgamation, Indian Bank will be merged with Allahabad Bank (anchor bank - Indian Bank); PNB, OBC and United Bank to be merged (PNB will be the anchor bank); Union Bank of India, Andhra Bank and Corporation Bank to be merged (anchor bank - Union Bank of India); and Canara Bank and Syndicate Bank to be merged (anchor bank - Canara Bank).

After amalgamation, the number of PSU banks will come down from 27 to 12, according to the Finance Minister announcement.

The mergers would help in better management of capital," she said, while announcing the merger proposal as a part of a package of reforms for the economy.

She also announced a series of governance reforms for government banks in the hope that the capital infused by the government into the lenders would result in "stronger banks".

Last year also, the government had approved the merger of Vijaya Bank and Dena Bank with Bank of Baroda.