Aimed at boosting economy, Sitharaman announces merger of 10 state-run banks

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New Delhi, August 30: A week after the government announced a slew of measures in a bid to boost the economy, Union Minister of Finance Nirmala Sitharaman on Friday made another set of announcements aimed at strengthening the banking structure in the country.

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Sitharaman announced that Punjab National Bank, Oriental Bank of Commerce and United Bank will be merged to form the second-largest public sector bank with a cumulative business of Rs 17.95 lakh crore.

Canara Bank will be merged with Syndicate Bank to form the fourth largest public sector bank with a business of Rs 15.20 lakh crore.

Union Bank of India, Andhra Bank and Corporation Bank will be merged to become the fifth-largest public sector bank now, Sitharaman said at a press conference in New Delhi.

On the other hand, Indian Bank will merge with Allahabad Bank to form the seventh-largest Public Sector Bank with a business of Rs 8.08 lakh crore.

The Finance Minister added that there will be two banks which will have national presence – Bank of India with Rs 9.3 lakh crore of business size and Central Bank with Rs 4.68 lakh crore of business size.

After the consolidation of these banks, India will now have 12 Public Sector Banks, reduced by 15 from a total of 27, she said.

Last week, Ms Sitharaman had announced that the government would release Rs 70,000 crore for bank capitalisation. While this amount is to be released upfront, she also announced additional lending and liquidity to the tune of Rs 5 lakh crore to PSBs.

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