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New Delhi: Finance & Corporate Affairs Minister Nirmala Sitharaman on Friday, 30 August 2019, announced the Union Government’s decision to consolidate Public Sector Banks (PSBs) for strong national resence & global reach.

The banks being amalgamated together handle 82% of PSB business and 56% of Commercial bank business. These are being brought together to strengthen
national presence and regional focus

Through a presentation, the Finance Minister underscored strong banks are imperative for achieving the target of $5 trillion economy in 2024 from $ 2.6 trillion in 2017.

The Minister said that strong foundation is being laid through Financial Sector Reforms, which is an ongoing endeavour. and the task at hand now is “Building NextGen Banks – Unlocking potential through Consolidation”

Touching upon the objective, the Finance Minister said that big banks with enhanced capacity will increase credit; It will also ensure our bankshave a strong national presence and global reach; there are operational efficiency gains that would reduce cost of lending and enhance risk appetite.

Focusing thrust on NextGen technology for banking, the Minister said that the Big banks will ensure wider offerings with enhanced customisation and better ability to raise resources from markets.

Snapshot of Consolidations

PNB + Oriental Bank of Commerce + United Bank
Same CBS platform (Finacle) in all three banks to enable quick realisation of gains

2nd largest PSB with business of Rs. 17.95 lakh crore (~1.5 times PNB)
2nd largest branch network in India, with 11,437 branches

High CASA and lending capacity combined in consolidated bank
Large cost reduction potential due to network overlaps
Cost saving and income opportunities for JVs and subsidiaries

Canara Bank + Syndicate Bank
Same CBS platform (iFlex) in both banks to enable quick realisation of gains

4th largest PSB with business of Rs 15.20 lakh crore (~1.5 times Canara Bank)
3rd largest branch network in India, with 10,342 branches

Large cost reduction potential due to network overlaps
Similar culture to enable smooth consolidation
Cost saving and income opportunities for JVs and subsidiaries

Union Bank + Andhra Bank + Corporation Bank
Same CBS platform (Finacle) in all three banks to enable quick realisation of gains

5th largest PSB with business of ₹ 14.59 lakh crore (~2 times Union Bank of India)
4th largest branch network in India, with 9,609 branches

Business to become twice to 4½ times existing bank business
Large cost reduction potential due to network overlaps

Indian Bank + Allahabad Bank
Same CBS platform (BaNCS) in both banks to enable quick realisation of gains

7th largest PSB with business of ₹ 8.08 lakh crore (~1.9 times Indian Bank)
Nationwide presence with strong networks in the South, North and East

Doubling of business size
Major scaling up of reach due to complementary networks
High CASA and lending capacity in consolidated bank