Bank Merger News: The number of public sector banks in the country may decrease. Many smaller public sector banks may become history. The government has developed a major plan for smaller public sector banks. In fact, the government is preparing to merge larger banks. India’s banking sector is about to undergo another major transformation.

Government Bank Merger: The number of public sector banks in the country may decrease. Many smaller public sector banks may become history. The government has developed a major plan for smaller public sector banks. In fact, the government is preparing to merge larger banks. India’s banking sector is about to undergo another major transformation. Bank mergers are once again imminent. This time, the government is moving forward with the merger of smaller public sector banks. In fact, Moneycontrol reported that the government may merge several smaller banks in the country in FY27. These banks will be merged with banks like SBI, PNB, and Bank of Baroda.

Preparations for Bank Mergers

The government has made significant preparations to further streamline public sector banks. The government is preparing to merge these banks as part of banking reform. According to sources, the banks to be merged include Indian Overseas Bank (IOB), Central Bank of India (CBI), Bank of India (BOI), and Bank of Maharashtra (BOM).

Which banks will be merged?

The government is preparing to merge small public sector banks with large public sector banks. These banks could be merged with larger banks like Punjab National Bank (PNB), Bank of Baroda (BoB), and State Bank of India (SBI). The government is preparing to strengthen the banking sector through this merger. The government is attempting to strengthen the banking sector by aligning the NPAs, expenses, and low profits of smaller banks with larger banks. Furthermore, the merger will support credit expansion. The government aims to create a stronger and better banking infrastructure by merging smaller banks with larger banks. This proposal will first be discussed with senior officials at the Cabinet level and then sent to the Prime Minister’s Office (PMO).

Bank mergers have happened before

This is not the first time. The government has previously merged large banks. Between 2017 and 2020, the government merged 10 public sector banks. The number of public sector banks in the country dropped from 27 to 12. The government had previously merged 10 banks. The government merged the state-owned banks Oriental Bank of Commerce (OBC) and United Bank of India (UBI) with PNB. Similarly, Syndicate Bank merged with Canara Bank. Before that, five banks had merged with SBI: SBBJ, Bank of Patiala, Bank of Hyderabad, and Bharatiya Mahila Bank.