Present Mirror
An Image of Truth
Government announces 55,250 crores compliances, as 10 public sector banks merge in to 4
- FINANCE
- Jayant Gattani | Updated: April 6, 2020, 12:39 p.m.
This slow down has had a huge impact on majority of the sectors like auto, consumer discretion, finance to name a few. State Bank of India will still be the biggest bank of India and mother of all banks as it is often referred.
Since last year the indian economy has been facing a slowdown. This slow down has had a huge impact on majority of the sectors like auto, consumer discretion, finance to name a few. In order to fight the slow down the government had announced a series of measures and relief packages from the tax cut to reducing the repo rates.
The Finance Minister of India last year announced the amalgamation of 10 public sector banks into 4 banks. This step was taken by the government as a measure to boost the economy. These mergers came into effect from 1st April 2020. Here are some of the key points which everyone should know about the merger:
1. State Bank of India will still be the biggest bank of India and mother of all banks as it is often referred.
2. Oriental Bank of Commerce and United bank will be amalgamated with Punjab National Bank and the amalgamated bank will be the 2nd largest bank of the country. Let us look at some financial figures as per March 2019
|
|
PNB |
UBI |
OBC |
Post Amalgamation |
|
Total Business (in Rs. Lakh Crores) |
11.82 |
2.08 |
4.04 |
17.94 |
|
CASA Ratio |
42.16% |
51.45% |
29.40% |
41.33% |
|
Net NPA |
6.55% |
8.67% |
5.93% |
6.6% |
|
No. of Employees |
65,116 |
13,804 |
21,729 |
100,649 |
3. Syndicate bank will merge into Canara bank and will become 4th largest bank.Let us look at some financial figures as per March 2019
|
|
Canara Bank |
Syndicate Bank |
Post Amalgamation |
|
Total Business (in Rs. Lakh Crores) |
10.43 |
4.77 |
15.20 |
|
CASA Ratio |
29.18% |
32.58% |
30.80% |
|
Net NPA |
5.37% |
6.17% |
5.58% |
|
No. of Employees |
58,350 |
31,535 |
89,885 |
4. Andhra Bank and Corporation Bank will merge into Union Bank of India. Let us look at some financial figures as per March 2019
|
|
Union Bank of India |
Corporation Bank |
Andhra bank |
Post Amalgamation |
|
Total Business (in Rs. Lakh Crores) |
7.41 |
3.19 |
3.98 |
14.59 |
|
CASA Ratio |
36.10% |
31.59% |
31.39% |
33.02% |
|
Net NPA |
6.85% |
5.71% |
5.73% |
6.20% |
|
No. of Employees |
37,262 |
17,776 |
20,346 |
75,384 |
5. Indian bank and Allahabad Bank will be merged. Let us look at some financial figures as per March 2019
|
|
Indian Bank |
Allahabad Bank |
Post Amalgamation |
|
Total Business (in Rs. Lakh Crores) |
4.29 |
3.77 |
8.07 |
|
CASA Ratio |
34.71% |
49.49% |
41.60% |
|
Net NPA |
3.75% |
5.22% |
4.39% |
|
No. of Employees |
19,604 |
23,210 |
42,814 |
6. The government will also infuse Rs. 55,250 crores for credit growth and regulatory compliances.
7. Of the sum announced PNB will get Rs. 16,000 crores, UBI Rs. 11,700 crores, Canara Bank Rs. 6,500 crores, Indian bank Rs. 2,500 crores.
8. This is the biggest ever consolidation exercise in public sector banks.
9. The exercise took place amid the ongoing Covid-19 crisis.
The top-level executives of all the anchor banks are positive about the move and are well prepared for the exercise to take place. If executed well and proper attention is given to governance then the public banking space in India can see a positive impact and also gain trust of various stakeholders.
Jayant Gattani is an established Chartered accountant and has given various views on ongoing economical and financial situation in the country.