RBI approves amalgamation of 10 public sector banks from April 1

The Reserve Bank of India (RBI) on Saturday approved the amalgamation scheme of 10 public sector banks four namely Oriental Bank of Commerce and United Bank of India into Punjab National Bank; Syndicate Bank into Canara Bank; Andhra Bank and Corporation Bank into Union Bank of India; and Allahabad Bank into Indian Bank.

According to the RBI, the scheme will come into force from April 1, 2020, and all the branches of oriental bank of commerce and United Bank of India will start functioning as PNB branches. Similarly, Syndicate Bank branches will functional as Canara Bank branches; Andhra Bank and Corporation Bank branches will function as Union Bank of India branches and Allahabad Bank branches into Indian Bank branches.

Following the consolidation, there will be seven large public sector banks and five smaller ones. There were as many as 27 PSBs in 2017. The merger would result in the creation of seven large PSBs with scale and national reach, with each amalgamated entity having the business of over Rs 8 lakh crore.

Earlier on March 4, 2020, the government notified the amalgamation schemes for 10 state-owned banks into four as part of its consolidation plan to create bigger size stronger banks in the public sector. Bank officers' unions, however, earlier this week wrote to the prime minister seeking to defer the merger schemes of lenders due to the lockdown triggered by coronavirus outbreak.

The RBI in its notification related to amalgamation of Oriental Bank of Commerce and United Bank of India to operate as branches of Punjab National Bank said, "The Amalgamation of Oriental Bank of Commerce and United Bank of India into Punjab National Bank Scheme, 2020 dated March 4, 2020, issued by the Government of India was published under Extraordinary Part II-Section 3-Sub-section (i) in the Gazette of India sanctioning the Amalgamation of Oriental Bank of Commerce and United Bank of India into Punjab National Bank in terms of section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) and section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980). The scheme comes into force on the 1st day of April 2020." It added, "Consequently, all branches of Oriental Bank of Commerce and United Bank of India will function as branches of Punjab National Bank from April 1, 2020. Customers, including depositors of Oriental Bank of Commerce and United Bank of India, will be treated as customers of Punjab National Bank with effect from April 1, 2020."

With this amalgamation, the Punjab National Bank will turn up to be India's second-largest bank after State Bank of India, with business size of Rs 17.94 lakh crore. SBI has a business of over Rs 52 lakh crore.

The RBI in its notification related to amalgamation of Allahabad Bank and Indian Bank said, "The Amalgamation of Allahabad Bank into Indian Bank Scheme, 2020 dated March 4, 2020, issued by the Government of India was published under Extraordinary Part II-Section 3-Sub-section (i) in the Gazette of India sanctioning the Amalgamation of Allahabad Bank into Indian Bank in terms of section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970). The scheme comes into force on the 1st day of April 2020." It added, "Consequently, all branches of Allahabad Bank will function as branches of Indian Bank from April 1, 2020. Customers, including depositors of Allahabad Bank, will be treated as customers of Indian Bank with effect from April 1, 2020."

The RBI in its notification related to amalgamation of Andhra Bank and Corporation Bank into Union Bank of India said, "The Amalgamation of Andhra Bank and Corporation Bank into Union Bank of India Scheme, 2020 dated March 4, 2020, issued by the Government of India was published under Extraordinary Part II-Section 3-Sub-section (i) in the Gazette of India sanctioning the Amalgamation of Andhra Bank and Corporation Bank into Union Bank of India in terms of section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) and section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980). The scheme comes into force on the 1st day of April 2020." It added, "Consequently, all branches of Andhra Bank and Corporation Bank will function as branches of Union Bank of India from April 1, 2020. Customers, including depositors of Andhra Bank and Corporation Bank, will be treated as customers of Union Bank of India with effect from April 1, 2020."

The RBI in its notification related to amalgamation of Syndicate Bank into Canara Bank said, "The Amalgamation of Syndicate Bank into Canara Bank Scheme, 2020 dated March 4, 2020, issued by the Government of India was published under Extraordinary Part II-Section 3-Sub-section (i) in the Gazette of India sanctioning the Amalgamation of Syndicate Bank into Canara Bank in terms of section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970). The scheme comes into force on the 1st day of April 2020." It added, "Consequently, all branches of Syndicate Bank will function as branches of Canara Bank from April 1, 2020. Customers, including depositors of Syndicate Bank, will be treated as customers of Canara Bank with effect from April 1, 2020."

With the execution of this scheme, Bank of Baroda will become the third-largest bank and will be followed by Canara Bank, Union Bank of India, Bank of India, and Indian Bank. The other PSBs are Central Bank of India, Indian Overseas Bank, UCO Bank, Bank of Maharashtra, and Punjab & Sind Bank.