New Delhi (NVI): The merger of 10 Public Sector Undertaking (PSU) Banks, that was announced in August last year, comes into effect from today. With this, six banks will cease to exist.
The Union Cabinet had given final approval in this regard on March 4.
Reserve Bank of India has also revealed that the scheme of merging these 10 PSU banks into four bigger lenders is on schedule i.e., it will come into force from April 1, despite the country-wide coronavirus lockdown.
Union Finance Minister Nirmala Sitharaman had also announced that the mega bank consolidation plan will be executed as planned.
In the biggest consolidation exercise in the banking space, Sitharaman in her mega plan had announced the merger of 10 public sector lenders into four bigger and stronger banks in August 2019.
With this merger, the total number of public banks in India comes down to 12. The four banks which absorbed the smaller PSU banks are Punjab National Bank, Canara Bank, Union Bank of India and Indian Bank.
Following the merger, customers, including depositors of merging banks, will be treated as customers of the banks in which these banks have been merged.
Bank mergers have also taken place in the past as well. Last year, Dena Bank and Vijaya Bank were merged with the Bank of Baroda.
Kotak Mahindra Bank and ING Vysya Bank merger and amalgamation of Centurion Bank of Punjab Ltd. with HDFC Bank took place in 2014 and 2008, respectively.
