bank mergers

The proposed bank mergers could be less traumatic for account holders, with finance minister Nirmala Sitharaman promising to attend to problems arising out of tech related systemic changes. Account holders could face issues related to standing instructions given to banks for dividend payments, reimbursements and fund transfers as IFSC codes of banks which will be merged with other banks will change.

Banking system technology along with geographical considerations played a crucial role in deciding which banks could be merged together. While Canara and Syndicate Bank were on the iFlex core banking system, Indian and Allahabad banks used BaNCS, prompting the finance ministry to go for these alliances for a smooth merger. After mergers, total PSBs stand at 12.

Finance minister Nirmala Sitharaman on Wednesday said there was no uncertainty about the merger of 10 public sector banks to create four large entities and things were moving in line with the schedule.

The biggest-ever consolidation exercise in the public sector banking space effected on Wednesday will mark a new dawn for the Indian banking sector, the finance ministry said on Wednesday. Six PSBs namely Oriental Bank of Commerce, United Bank of India, Syndicate Bank, Andhra Bank, Corporation Bank and Allahabad Bank have been merged into four bigger lenders.

Finance minister Nirmala Sitharaman on Wednesday said the exercise of consolidation of 10 public sector banks (PSBs) into four is on course and the merger will come into effect from April 1, 2020. The Union Cabinet, she said, has given a go-ahead for the merger proposal and the govt has been in regular touch. There will be no regulatory issues, she said.

The stage is set for intensification of attempts at public sector bank consolidation after a presentation by State Bank of India (SBI) chairman Rajnish Kumar at a recent meeting of bankers, although it isn't quite clear on who will make the first move.

The Bank of Baroda (BoB) also finalised the share swap ratio for merger of Vijaya Bank and Dena Bank with itself. As per the scheme of amalgamation, shareholders of Vijaya Bank will get 402 equity shares of BoB for every 1,000 shares held.

Finance minister Nirmala Sitharaman announced mega plan to merge 10 public sector banks (PSBs) into four as part of plans to create fewer and stronger global-sized lenders. The exercise, seen together with the previous two rounds of bank consolidation, is aimed to boost economic growth from a five-year low and will result in only 12 PSBs compared to 27 in 2017.

The government on Thursday said the mega bank consolidation plan is very much on track and will take effect from April 1 despite the onslaught of coronavirus pandemic throwing the country out of gear. The Union Cabinet earlier this month approved amalgamation of 10 public sector banks into 4 global size lenders, beginning next financial year.

Banks across the Gulf are leading a record wave of mergers and acquisitions as governments look for ways to stay competitive and battle slow growth. About a dozen lenders are involved in mergers or takeovers. The flow of deals has been gathering speed ever since the mega merger between two of Abu Dhabi’s largest banks in 2017 and the combination of three of the emirate’s investment firms that was completed last year.

Finance Minister Nirmala Sitharaman stated there is no roadmap for public sector bank mergers, indicating consolidation is not actively considered. A new banking reform panel will review the sector's future, examining all aspects to strengthen the ecosystem and align it with India's growth goals.

In a major relief to lakhs of policyholders, the insurance regulator has issued guidelines to ensure that the government’s 10-bank merger will not affect any merging lender’s customer who is part of a bank’s group health policy.

The merger process of Indian Bank and Allahabad Bank could face a slight delay in the wake of the 21-day nationwide lockdown, an official of the Kolkata-based lender said on Saturday.

The plan to merge ten public sector banks into four amid economic growth falling to a six-year low, has generated a lot of talking points. One of them is, why can't the government sell its stake in these banks and privatise them.

Lakhs of mediclaim customers are expected to be the first casualty of the government-proposed merger of 10 banks as premiums for most of the customers of the banks which are being merged are set to increase between 50% and 300% from next year. Senior citizens, who depend on pensions or interest from FDs for monthly income, are expected to be hit the hardest as they would most probably be not able to afford such a steep increase in premiums. The hike in premiums will be much lower for younger customers.

The mega merger of ten public sector undertaking (PSU) banks into four large entities, announced by finance minister Nirmala Sitharaman in August 2019, came into effect from Wednesday. Customers, including depositors of the merging banks, will now be treated as customers of the banks in which they have merged.