'Significant, consistent shift in business' The report further states that PSU bank mergers have enabled a significant shift in business - both credit and deposit - from public to private sector banks in the past few years. All these mergers took effect from April 1, 2020. The four new sets of mergers were as follows: * Punjab National Bank (PNB), Oriental Bank of Commerce and United Bank of India were merged to form the nation's second largest lender * Canara Bank and Syndicate Bank were merged to form fourth largest public bank * Union Bank of India was amalgamated with Andhra Bank and Corporation Bank * Indian Bank merged with Allahabad Bank With this, the number of PSBs came down to 12 - seven large and 5 small ones - from 27 in 2017.
In 2019, finance minister Nirmala Sitharaman had unveiled a mega plan to merge 10 PSBs into 4 as part of plans to create fewer and stronger global-sized lenders. First round: PSB mergers There were 27 state-run banks in 2017 when the State Bank of India (SBI) took over 5 of its associates and Bharatiya Mahila Bank. The sector has already witnessed one round of consolidation involving public sector banks (PSBs) over the period 2017-20. "Given the current buoyancy in the equity markets, there is a significant opportunity for large Indian private banks to explore the inorganic growth route through the acquisition of smaller private banks that continue to face headwinds or even public sector banks where the government is considering disinvestment," it noted. The consolidation this time will be driven by private sector banks, the report said. NEW DELHI: The banking sector is set to witness a fresh phase of consolidation most likely over the medium-term, that is, by FY22-24, a report by Acuite revealed.
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