Banking Reforms: Merger of Public Sector Banks 9/4/18, 7)33 PM

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Banking Reforms: Merger of Public Sector Banks Quizzes

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A few days ago an event was organized in Haryana, to discuss the governance Current Affairs Quiz
01 Attempt Now >>
reforms in PSBs working, with the name of Gyan Sangam. In the press
conference organized after the event, Finance Minister Arun Jaitley talked
Quantitative Aptitude Quiz
about the consolidation of Public Sector Banks, which is aimed to have 02 Attempt Now >>
strong banks rather than having numerically large number of banks.
Banking Awareness Quiz
Banking Industry has seen a number of changes over the last 5 decades. The 03 Attempt Now >>
major changes been the Nationalization of the banks in 1969 and 1980,
followed by the liberalization of the economy in 1991, opening up of Banking Reasoning Quiz
sector for Private sector in 1993 and the latest one being the emergence of 04 Attempt Now >>

Payment Banks and Small Finance banks in 2015.

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Despite the changes witnessed over the years, there still exist a number of
challenges which need to be addressed, one such Challenge being the NPA. In
the Quarter ending December 2015, nearly 11 Public Sector banks reported
loss, which even includes big names like, Bank of Baroda, IDBI Bank, Bank of
India and Indian Overseas Bank. The net non-performing assets (NPA), in the
banking sector, have crossed Rs 4.3 lakh crore during the quarter-ended
December 31, 2015.
Besides the problem of NPA, the other problem faced by the banking sector is
of Capital Requirement to meet the new capital adequacy norms set up by
Basel –III standards.

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To overcome the challenges and threats posed at present and in fore future,
and give a new direction to Banking Reforms, government is considering
merging the existing Public Sector Banks. So, the government’s step to
amalgamate 27 banks into six large institutions is intended to adequately
bolster the state-owned banks’ capital base. In addition, previously Banking
Sector has seen Banks such as Global Trust Bank and New Bank of India
merged with Oriental Bank of Commerce and Punjab National Bank.
Below we are sharing the name of Public sector Banks with the Anchor Bank
(with which other Banks will get merged).
1. State Bank of India (Anchor Bank)

State Bank of Hyderabad

State Bank of Patiala
State Bank of Travancore
State Bank of Bikaner & Jaipur
State Bank of Mysore

2. Punjab National Bank (Anchor Bank)

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Banking Reforms: Merger of Public Sector Banks 9/4/18, 7)33 PM

Oriental Bank of Commerce

Allahabad Bank
Corporation Bank
Indian Bank

3. Canara Bank (Anchor Bank)

Syndicate Bank
Indian Overseas Bank
UCO Bank

4. Union Bank of India (Anchor Bank)

IDBI Bank Ltd

Central Bank of India
Dena Bank

5. Bank of India (Anchor Bank)

Andhra Bank
Bank of Maharashtra
Vijaya Bank

6. Bank of Baroda (Anchor Bank)

United Bank of India

Punjab & Sind Bank
Bhartiya Mahilla Bank

Advantage of Merger
1. It is expected to improve the e^ciency and service delivery of Public
Sector Banks.
2. The sharing of Infrastructure will give customers a wider use of the ATM
network.
3. The charges on cross-bank ATM usage would reduce considerably.
4. Customers of smaller banks will get access to wider use of Vnancial
instruments like mutual funds and insurance products, as offered by Big
Banks.
5. Large banks would have a wider capital base enabling them to offer big
ticket loans on their own without being part of a consortium.
Disadvantages of Merger
1. Smaller banks will tend to lose local characteristics, which customers
preferred because of cultural ainity
2. A few large inter-linked banks expose the broader economy to greater
jnancial risks.
3. Human resource issues can be di^cult to handle; career growth of senior
management and other workers could become problematic.
However, the government will set up an expert panel for the consolidation

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Banking Reforms: Merger of Public Sector Banks 9/4/18, 7)33 PM

process and the earlier established Bank Board Bureau will also help in the
consolidation process. It is speculated that the merger between the banks will
be based on geographical and technological synergies, human resources and
business projle, among others.

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Source: Hindustan Times

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270 upvotes 76 comments

Tags : Bank & Insurance SBI PO General

Posted by:

Neeraj Mishra
Mar 16 Bank & Insurance

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Comments WRITE A COMMENT

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shubham witty Aug 15

@Prasenjeet Tewary hmmm...padh ri hu ye bhi
0 UPVOTE 0 REPLY

Sonam Suj Feb 28

I need a help
0 UPVOTE 0 REPLY

Sonam Suj Feb 28

Regarding this sbi merger...I have a research project on sbi merger...so
can anyone help me out to jnd the relevant data and help me in making
the questionnaire?
0 UPVOTE 0 REPLY

Prasad Jun 6
@Masthan Chinna
0 UPVOTE 0 REPLY

Harish Dadwal Jun 16

Is it bank seeker job benejt or not
0 UPVOTE 0 REPLY

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Banking Reforms: Merger of Public Sector Banks 9/4/18, 7)33 PM

Masthan Chinna Jun 17

@Bhavya Kapuluri
0 UPVOTE 0 REPLY

Kamakshi Jul 5
@Pandu Bellamkonda
0 UPVOTE 0 REPLY

Pritesh Gupta Aug 10

kya esa ho skta h kya Jo govt bank hai woh private hojaye in future or
merger Tak toh sahi h @Neeraj Mishra @Vijay @Hitman Agent 47
0 UPVOTE 0 REPLY

Kishore Kumar Dec 5

@Neeraj Mishra sir pls give me ARC REPORTS IN EASY WAY TO
REMEMBER...PLEASE SIR
0 UPVOTE 0 REPLY

Dhananjay Sarode Jul 24

reduce operational costs of banks, do banks require big spaces,
localities.. Cut down on infrastructure cost.. Create bigger entities..
0 UPVOTE 0 REPLY

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